Definition of a conflict of interest – A conflict of interest is a situation where competing obligations or motivations result in, or are likely to result in, one of the following outcomes:
A client is disadvantaged/makes a loss when GPS (including its employees, agents, contractors or any person directly or indirectly linked to us by control) is at an advantage/makes a gain
A client makes a gain/avoids a loss when another client makes a loss/is disadvantaged
Any instance in which activity by GPS in one situation may compromise its advice or create a perception that its advice may be compromised and therefore limit its ability to act in another situation.
The Conflict of Interest Policy
In line with FCA Rules, GPS has established and implemented a conflicts of interest policy which is appropriate to the investment services that it provides and takes into account its client base.
Areas of conflict – This list is not exhaustive and just provides a few generic examples of conflicts and generic measures to manage them as an indication.
Interests in competitors, clients, or suppliers- Except with the approval of the Compliance Officer, no person shall serve as an employee, officer, Partner, or trustee of, or have a substantial interest in or business relationship with, a competitor, client, or supplier (other than any affiliate or parent of GPS ) that could create a divided loyalty or the appearance of one.
Inducements – Staff must not offer to give, or solicit, or accept any inducements in the course of carrying on regulated business which is likely to conflict with any duties owed to users. Before offering gifts or benefits to third parties or accepting gifts or benefits from third parties as an incentive to doing business, the matter must be approved in advance by the Compliance Officer.
Interest in transactions and personal account dealing – No person shall engage in any transaction involving GPS if he/she or a member of his/her immediate family including spouse and children (or any other compromising relationship) has an interest in the transaction or can benefit directly or indirectly from the transaction (other than through the employee’s normal compensation), except as specifically authorised in writing by the Compliance Officer
Diversion of business opportunity – No person may acquire, or derive personal gain or profit from, any business opportunity or investment that comes to his attention as a result of his association with GPS, and in which he knows we might reasonably be expected to participate or have an interest, without first disclosing in writing all relevant facts to us, offering the opportunity to us, and receiving specific written authorisation from the Compliance Officer.
Outside employment and business interests – Outside employment and business interests outside the scope of the contract of employment or contract for services with GPS are not permitted unless specifically approved in writing in advance by the Compliance Officer (through consultation with senior management where appropriate) by providing full and accurate particulars. It is not permitted to participate in outside employment or business interests outside the scope of employment/services, including personal investments, which interfere with work or which may put personnel in a position of conflict with the interests of clients.
Employee loyalty – Employee loyalty may be compromised where an employee may be considering employment with another entity that GPS conducts business with. Any employee considering employment with a client must contact HR.
Remuneration – Conflicts may arise where there is a direct link between the remuneration of persons principally engaged in one activity and the remuneration of, or revenues generated by, different persons principally engaged in another activity. GPS has adopted a policy where there is no such direct link within HR remuneration policies
The generic procedures referred to above are not a substitute for transaction-specific conflicts management. Persons dealing with clients must identify such specific conflicts as and when they arise.
To manage conflicts of interest within the Company, GPS maintains a conflicts register. The purpose of the register is to record and maintain a list of all actual and potential types of conflicts which may cause a material risk of damage to the interests of a client. The register also sets out measures GPS has taken to manage such actual or potential conflicts. The register should make references to the following matters:
It must identify the service or activity that GPS may carry out for a client.
The circumstances which constitute or may be perceived to give rise to a conflict of interest entailing a material risk of damage to the interests of the client.
Specify the procedures to be followed and measures to be adopted with a view to preventing the conflict of interest from constituting or giving rise to a material risk of damage to the interests of GPS clients.
Where the arrangements and measures implemented are not sufficient to mitigate the risk of disadvantage to existing or potential clients then the nature of the conflicts of interest arising must be disclosed to them prior to undertaking business. However, an over-reliance on disclosure without adequate consideration as to how conflicts may appropriately be managed is not permitted.