1 - Introduction: Stratton Street LLP (“the Firm” or “SSC”) is committed to compliance with Principle 8 and SYSC Rules and Guidance issued by the Financial Conduct Authority that requires the Firm to take all appropriate steps to identify and to prevent or manage any conflicts of interest in its business that might arise from time to time.
Set out below is the policy of the Firm for managing conflicts of interest as required by the FCA Rules. This policy identifies the potential conflicts of interest that may arise, summarises the controls implemented to manage any such conflicts of interest and serves as a record of the same.
2 - Identification of Conflicts: In accordance with SYSC 10.1.4R, Management have considered whether the Firm, a relevant person, or a person directly or indirectly or indirectly linked by control to the Firm:
Management has identified a number of conflicts and relationships which may lead to conflicts, including:
This list is not exhaustive and employees are required as a term of their contract to notify any conflicts that may arise and notify the Compliance Officer.
Management have determined that its policies and procedures are sufficient to manage actual and potential conflicts that may arise in the course of its business.
3 - Managing Conflicts: The Firm will manage the conflicts noted above to prevent them constituting or giving rise to a material risk of damage to the interests of its clients as follows:
Personal account dealing The Firm acknowledges that it is common for employees/members of financial institutions to undertake deals on their own behalf. The Firm also recognizes that this common practice can create a conflict with the duties owed to clients.
Employees/members and connected parties are consequently required to comply with the Firm’s Personal Account Dealing Policy which, amongst other matters, prohibits dealing in investments which are or which might reasonably be expected to be the subject of a client recommendation unless prior approval is received from the Firm’s Compliance Officer or the Chairman. It is envisaged that permission will only be granted in exceptional circumstances.
Directorships and other positions Employees/members must obtain permission from the Compliance Officer and Chairman to hold a directorship or other senior position in any company in which the Firm might reasonably be expected to recommend an investment or which is connected to a client.
Gifts and hospitality The Firm’s employees/members may not accept or give gifts or hospitality to or from an individual or firm with whom they conduct or intend to conduct business on behalf of the Firm unless it can be demonstrated that the acceptance or giving is appropriate and does not create any conflict of interest. This rule also applies where the direct recipient of the gift or other benefit is the spouse, co-habitant or child of the employee/member.
Gifts or hospitality valued at over £100 must be reported by employees/members to the Compliance Officer.
Remuneration The Firm’s management recognises that its remuneration policy must not create conflicts among its employees/members between their own personal interest and their regulated duties.
The remuneration of employees/members of the Firm is not linked to a specific transaction but may be linked to the general profits of the Firm which shall include the results of transactions. Factors relevant to remuneration can include personal factors such as productivity, quality of work, experience, individual reputation and performance.
Management oversight Any conflicts of interest arising will be referred to the Compliance Officer and the Board. The Compliance Officer is responsible overall for dealing with any conflicts of interest. The Compliance Officer will keep a written record of the conflicts that arise and that are managed in accordance with the policies and procedures of the Firm.
Independence policy The Firm envisages where appropriate managing conflicts of interest by relying on a policy of independence. This policy ensures that in providing services to clients, employees/members act independently of any interest that may conflict with the duties owed to different clients or between the Firm and its clients.
Disclosure The Firm shall use all reasonable steps to manage conflicts of interest. However, if those efforts are not sufficient to ensure, with reasonable confidence, that the risk of damage to the interests of a client will be prevented, the Firm shall, where appropriate, disclose the general nature and/or source of conflicts of interest in writing to the client before undertaking business for the client. Any disclosure shall contain sufficient information to allow the client to make an informed decision.
It is the Firm’s policy to disclose all material interests or conflicts of interest to a client whether generally or in relation to a specific transaction before it deals on behalf of a client, through its standard terms of business or otherwise. This disclosure is made even where the Firm has employed other measures to manage conflicts and those measures have the effect that the risk of damage to a client’s interests is low.
Declining to act In the event that the Firm determines that it is unable to manage a conflict of interest using one or more of the methods described in this policy, it may decline to act on behalf of a client.
Chinese Walls The Firm will employ a Chinese wall arrangement whenever it is possible in the opinion of the Compliance Officer to operate it effectively.
Internal controls The Firm will whenever potential conflict issues are identified employ appropriate internal control techniques including segregation of duties and internal checks and measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out services or activities.
Review We will review this Conflicts of Interest Policy monthly and, where appropriate, on an ad hoc basis, ensure it adequately reflects the types of conflicts that may arise, and how we manage those conflicts. We will take all appropriate measures to address any deficiencies (such as over reliance on disclosure of conflicts of interest).