Conflicts of Interest Policy
Policy Summary
As a Digital Investment Platform, Nosso Limited (“Nosso”) has a duty to act in the best interest of clients. Nonetheless, there may be circumstances where Nosso and its employees have personal, professional, or financial relationships or interests which conflict with that duty. Nosso has therefore adopted a Conflicts of Interest Policy (the “Policy”) to ensure that all appropriate steps are taken to identify, and eliminate or manage, any perceived, potential, or actual conflicts of interest across Nosso that may adversely affect its clients.
The Policy sets forth certain basic principles and processes relating to conflicts of interest that will be applied by Nosso and its employees. The Policy is supported and supplemented by a number of additional policies and procedures which address more specific conflicts of interest issues, including the Nosso Values and Code of Ethics, the Inducements Policy and the Order Transmission Policy.
Identification of conflicts
Under the Policy, employees are required to identify and disclose any conflicts of interest which might reasonably be expected to adversely affect Nosso’s clients. These conflicts of interest may be disclosed through annual conflicts questionnaires, certifications of employees, preapproval forms or other ad hoc communications. In identifying conflicts, employees are directed to consider, among other things, whether the Company or an employee:
- is likely to incur financial gain, or avoid financial loss, at the client’s expense;
- has an interest in the outcome of a service or transaction provided on the client’s behalf, which is distinct from the client’s interest in that outcome;
- has a financial or other incentive that favours the interest of one client over another;
- carries on similar business to that of the client; or
- receives or will receive from someone other than the client, an inducement for a service provided to the client other than the standard commission or fee for that service.
Types and sources of conflicts
Risk and Compliance captures all personal conflicts related to employees’ affiliations, relationships and investments in a conflict of interest register (the “Register”) and all organisational conflicts in a conflicts of interest matrix (the “Matrix”). The Register and Matrix list the conflict and summarise the key controls in place to address it.
Although the Register and Matrix are confidential and for internal use only, below are examples of conflicts of interest that typically exist in the asset management business and may be managed through a range of measures as discussed further in the following section:
- A Digital Investment Platform may receive fees from its affiliates which may cause it to direct investments to those accounts or investments and services to those affiliates.
- A Digital Investment Platform may be restricted from participating in certain transactions due to its possession of material non-public information.
- Employees may have personal investments in securities held by clients, or intended to be held by clients.
- Employees involved in selecting funds and or securities to be held on the platform may have personal investments in certain accounts.
Management of conflicts
Upon identification of a conflict, Nosso will evaluate the nature and the severity of the conflict to take appropriate actions to resolve the conflict of interest. In developing appropriate controls, Risk and Compliance will partner with the business area in which the conflict of interest arises. Nosso will not accept any business, carry on any activity, or permit any relationship that results in conflicts of interest which the Company determines cannot be managed effectively or are otherwise unacceptable. The precise controls implemented depend on the nature of the conflict and the risks it presents, but generally include one or more of the following:
- Training
- Monitoring
- Internal disclosure and recusal
- Control of information and access controls
- Restrictions on activities at both an individual and organisational level
- Segregation of duties
- Elimination of remuneration links
- Testing
- Avoidance
- External disclosure of conflicts
Nosso may provide clients with such information concerning conflicts of interest as appropriate and consistent with its contractual, regulatory and legal obligations. In all events, Nosso will disclose any material conflicts of interest and any other conflicts of interest where the measures implemented to manage the conflicts are insufficient to ensure, with reasonable confidence, that risks of damage to the interest of clients will be prevented. Any such disclosures will describe the general nature or source of the conflict of interest, explain the risks to the client that may arise as a result of the conflict of interest and describe the steps taken by Nosso to mitigate those risks in sufficient detail so as to enable the client to take an informed view. Prior to disclosing a conflict, Nosso will make a good faith effort to implement controls to mitigate the conflict of interest.
Monitoring of Conflicts
The Register and Matrix are updated on an ongoing basis by Risk and Compliance and reviewed on a periodic basis by Risk and Compliance and the Risk and Compliance Committee (“RACC”).
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