(a) Aravis Partners LLP ("The Firm”) is subject to the requirements of SYSC 10 (Conflicts of Interest).
(b) Under SYSC 10.1.10R, a common platform firm must, and a non-common platform firm should, "establish, implement and maintain an effective conflicts of interest policy that is set out in writing and is appropriate to the size and organisation of the firm and the nature, scale and complexity of its business”.
(c) The Firm is a common platform firm, and thus the SYSC 10.1.10R rule applies as a requirement.
(d) Under SYSC 10.1.5G, the circumstances which should be treated as giving rise to a conflict of interests cover cases where there is a conflict between:-
(i) the interests of the Firm, or certain persons connected to the Firm or the firm’s "group” (as defined), and the duty the Firm owes to a client; and
(ii) the differing interests of two or more of the Firm’s clients, to whom the Firm owes in each case a duty.
(e) It is not enough that the Firm may gain a benefit if there is not also a possible disadvantage to a client, or that one client to whom the Firm owes a duty may make a gain or avoid a loss without there being a concomitant possible loss to another such client (SYSC 10.1.5G).
(f) Reference should be made to section 8 of Chapter III of the Firm’s Compliance Procedures Manual for details of the FCA’s Conflicts of Interest requirements and guidance.
(g) The term ‘conflict of interest’ is not defined. The Firm refers to rules and guidance in SYSC 10 in identifying and managing any potential conflicts of interest.
2. Obligations on the Firm
The obligations on, and/or the guidance applicable to, the Firm in respect of Conflicts of Interest are set out in:-
(a) Principle 8 of PRIN – Conflicts of Interest;
(b) SYSC 4.3A.1AR and SYSC 10;
(c) COBS 2.1.1R(1) (the "Client’s Best Interests Rule”); and
(d) ESMA Q&A on MiFID II & MiFIR Investor Protection & Intermediaries Topics (Last Updated 18 December 2017) – e.g. Section 12 – Inducements - see
It is the policy of the Firm:-
(a) to take all appropriate steps to identify and to prevent or manage conflicts of interest from adversely affecting the interests of its clients; and
(b) where the effective organisational and administrative arrangements established by the Firm are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of a client will be prevented, to clearly disclose, in sufficient detail, taking into account the nature of the client, the following to the client before undertaking business for that client:-
• the general nature or the sources of conflicts of interest or both;
• the specific description of the conflicts of interest that arise;
• an explanation of the risks to the client that arise as a result of the conflicts of interest; and
• the steps taken to mitigate those risks.
4. Related Policies
Reference should be made to the following further policies, including Policies Statements, adopted by the Firm in respect of:-
(a) Gifts and Benefits;
(b) Financial Crime;
(c) Money Laundering Prevention – see the Risk Assessment section of the Money Laundering Prevention Chapter of the Firm’s Compliance Procedures Manual;
(d) Data Confidentiality and Information Security (for example, in respect of Chinese Walls);
(e) Personal Account Dealing Rules (in the Firm’s Compliance Procedures Manual);
5. Types of Conflicts
Possible conflicts of interests arising within the Firm fall within the following categories:-
(a) Investment conflicts;
(b) Pricing and valuation conflicts;
(c) Information distribution and disclosure conflicts
(d) Personnel conflicts; and
(e) Relationship conflicts.
(a) The Firm has established a record (the Conflict of Interest Record) of the kinds of service or activity carried out by or on behalf of the Firm in which a conflict of interests entailing a material risk of damage to the interests of one or more clients has arisen or, in the case of an on-going service or activity, may arise.
(b) The Firm requires each of its directors/partners, employees and other Approved Persons to provide the Compliance Officer with a record of their business interests so as to assist the Firm in identifying any potential conflicts of interest before they occur.
(c) The Firm requires each of its directors/partners, employees and other Approved Persons to confirm on an annual basis that their Record of Individual’s Business Interests continues to be correct, or otherwise, by signing a declaration to that effect.
(d) The Firm requires each of its directors/partners, employees and other Approved Persons to confirm in writing on an annual basis that they have read and understood the Conflicts of Interest Policy and agree to abide by it
(e) Before taking on a client the Firm will consider whether it would have any conflicts of interest if it were to take on the client. To assist the Firm it will make use of the templates M to S in the Money Laundering Chapter of its Compliance Procedure Manual. If no conflicts of interest are identified then the Firm will take on the client subject to completion of the money laundering prevention and client categorisation procedures as set out in the Firm’s Compliance Procedures Manual.
(f) If a conflict of interest comes to the Firm’s attention during the course of its relationship with a client then the Firm will make details of the conflict known to that client, and in consultation with the client the Firm will take whatever action it deems to be in the best interests of the client, and in accordance with the client’s instructions.
(g) Chinese Walls. The Firm has not implemented ‘Chinese Wall” / ‘Informational Barrier’ arrangements because, while the Firm undertakes corporate finance business, its size is such that everyone in the Firm is considered to be aware and have knowledge of the corporate finance business it conducts, and thus everyone is said to be within the Chinese Wall.
(h) It is the responsibility of the Compliance Officer to:-
• ensure that this Conflicts of Interest Policy Statement is approved by the Firm’s directors/partners each time it is updated, and annually;
• be its custodian;
• update it as and when necessary;
• review it at least once a year;
• make such changes to it as are deemed necessary; and
• ensure that each time the policy statement is updated it is brought to the attention of everyone in the Firm (see paragraph 12(b) of Chapter IV of the Manual).
7. Compliance Monitoring Procedures
Compliance will check that the above procedures are adhered to.