The European Financial Instruments Directive (MIFID) has obliged financial services providers to implement measures aimed at preventing, identifying and managing conflicts of interest.
A conflict of interest can be defined as a situation whereby:
the interests of a financial institution or of a person concerned may be in contradiction with or diverge from the interests of a client or of a group of clients, or
the interests of a client or of a group of clients diverge, the financial institution having obligations to each and every one of its clients.
Against this background, Experta Corporate and Trust Services SA (hereinafter “Experta”) has laid down a Conflicts of Interest Policy. The purpose of this policy is to prevent, identify and manage conflicts of interest that may occur between Experta (or one or more BIL entities) and its clients.
The various situations which may give rise to conflicts of interest can be summarised as follows:
Experta is likely to make a make a financial gain or avoid a loss at the client’s expense;
Experta has an interest in the result of the service provided to the client or of the transaction executed on behalf of the client which diverges from the client’s interest;
Experta is prompted, for financial or other reasons, to prioritise the interests of a client or group of clients over those of another client or group of clients concerned;
Experta conducts the same business activities as the client;
Experta receives or will receive from a person other than the client a benefit relating to the service provided to the client in the form of money, goods or services, other than the commission or fees normally charged for this service.
The Conflict of Interest Policy implemented by Experta is based on five fundamental values:
Integrity: Experta will act with integrity in its professional and commercial relations. The services and transactions may not be tainted by personal interest or influenced by the interests of other parties.
Objectivity: Experta will do its utmost to be objective in its professional and commercial judgements.
Competence: Experta will only take on tasks for which it has the competence required to complete them successfully.
Fairness: Experta will take the interests of its clients into consideration and treat them fairly.
Transparency: Experta will always take the interests of its clients into consideration and deal with them in a transparent manner. Where applicable it will inform clients of the existence of conflicts of interests.
The aims pursued by the implementation of the Conflict of Interests Policy include:
Developing a comprehensive approach and methodology for the identification, prevention and handling of potential conflicts of interest;
Establishing the principles and rules with which employees must comply so that, at every level, conflicts of interest are identified, prevented and dealt with;
Determining the various roles and responsibilities of each employee in respect of the above rules;
Emphasising the main conflicts of interest identified and the measures taken to reduce them.
The measures taken can be subdivided into three levels:
Level 1 measures apply to all employees;
Level 2 measures apply to certain Experta departments and employees to take account of specific risk factors related to their operations;
Certain employees may be subject to specific measures relating to identified potential conflicts of interest.
If the preventive measures implemented prove insufficient to ensure that clients’ interests are not harmed, Experta will, before acting on its clients’ account, ensure that they are correctly informed of the nature and, if applicable, the source of any remaining conflicts of interest.