This Conflict of Interest policy is applicable to the following companies which, for the purpose of this document, will be referred to as “RPS”:
- Retirement Planning Services (Pty) Ltd
- Retirement Planning Services International (Pty) Ltd
INTRODUCTION & PURPOSE
In terms of the General Code of Conduct for Authorised Financial Services Providers (FSPs) and Representatives, as amended (“the Code”), issued in terms of the provisions of the Financial Advisors and Intermediary Services Act (Act no. 37 of 2002) (“FAIS”) financial services providers must take all necessary steps to eliminate any practices and/or services that may create a conflict between their interests and the interests of an existing or potential client.
RPS sets high standards of service and advice and have due regard to its clients and has therefore put into place a Conflict of Interest Management Policy to ensure that no service or advice would be compromised by any conflict of interest.
The purpose of this Conflict of Interest Policy is to outline a suitable approach and response to the identification and management of conflict of interest.
This policy aims to promote transparency and fairness in the interest of clients, employees and providers. This policy applies to all employees, third parties where applicable and, associates as defined.
All employees are required to read this policy and to report any conflict of interest to the relevant Key Individual or Group Compliance Officer.
No person (employee of the company) may avoid, limit or circumvent, or attempt to avoid, limit or circumvent compliance with the company’s Conflict of Interest Management policy through or with assistance of an associate or third party or through any arrangement involving an associate or a third party.
Failure of any employee to comply with this policy may lead to disciplinary steps being taken, which steps could result in dismissal or removal from a position.
Please refer to Annexure A for all definitions
WHAT IS CONFLICT OF INTEREST
Conflict of interest is any situation, including financial interest, ownership interest, or any relationship with a third party, in which a provider or representative has actual or potential interest that may:
- Influence the objective fulfilment of obligations to a client;
- Influence the offering of unbiased and fair advice or service to a client; or
- Prevent the provider or representative from acting in the best interest of a client
This may include:
- Real or perceived financial gain resulting from recommendations to our clients that prejudice the client;
- An outcome of service delivery or transaction that may not best serve the interest of the client;
- Non-cash incentives that may be received by the company as a result of affecting any predetermined transaction and/or product; and
- Effecting a transaction and/or product that may benefit a party other than the client.
The conflicting interest referred to throughout this policy may be direct or indirect – the interest might be that of the Responsible Person, that of another person such as a relative or friend of the Responsible Person, or that of an organisation in which the Responsible Person or such other person has an interest.
FINANCIAL INTERESTS THAT ARE ALLOWED
The company and its employees (i.e. representatives) may only receive or offer the following financial interest from or to a third party. The financial interest includes but is not limited to –
a) Commission, management and or administration fees authorised in terms of the Long-term Insurance Act (No. 52 of 1998), the Short-term Insurance Act (No. 53 of 1998) or the Medical Schemes Act (No. 131 of 1998).
Commission is strictly monetary amounts paid to the company, designated as such and determined on a basis specified by regulation.
b) Fees authorised in terms of the Long-term Insurance Act, the Short-term Insurance Act or the Medical Schemes Act if those fees are reasonably in line to a service being rendered.
c) Fees for the rendering of a financial service in respect of which commission or fees referred to in paragraph (a) or (b) above is not paid, if those fees:
- are specifically agreed to by a client in writing and
- may be stopped at the discretion of the client
d) Fees or remuneration for the rendering of a service to a third party, which fees or remuneration are reasonably in line with the service being rendered
e) Subject to other legislation, an immaterial financial interest (R1 000 maximum per annum)
f) A financial interest not referred to in paragraphs (a) to (e) above, which is obtained at fair value by the FSP or its representatives at the time of obtaining it
g) Sales tools or services (electronic or otherwise) that the company requires to provide a financial service, on condition that the tools and services provided to the company
- is essential in enabling the company to prepare, submit and finalise any business transaction in accordance with a product suppliers business requirements
- is not essential, but offers value to the company in terms of improving on the FSP’s interaction with clients
h) Services that are essential in enabling the company to prepare, submit and/or finalise the transaction documentation, may be received unless it would influence the company in the objective performance of its functions or prevent the company from rendering unbiased services
i) Services that do not form part of those described in (h) above may be obtained at a fair market price
The company and its employees (i.e. representatives) may not offer any financial interest to a Responsible Person for:
- Giving preference to the quantity of business secured, to the exclusion of the quality of service rendered to clients; or
- Giving preference to a specific product suppliers, where a representative may recommend more than one product supplier to a client; or
- Giving preference to a specific product of a product supplier, where a representative may recommend more than one product of that product supplier to a client
GIVING AND RECEIVING OF GIFTS AND OR OTHER FINANCIAL INTERESTS OR BENEFITS
Key Individuals and Representatives of RPS are not allowed to spend on, or receive from Key Individuals or Representatives of other FSPs an “immaterial financial interest” of more than R1 000 per year.
This includes, but is not limited to:
- Entertainment (Golf days, Tickets to sporting events)
(Note that the R1 000 limit applies per Representative, and not per FSP or Product Supplier.)
The company shall only accept training and attend seminars or presentations offered to providers on:
a) products or legal matters relating to products of product suppliers
b) general financial and industry information, and
c) specialised technological systems of a product supplier necessary for the rendering of a financial service to enable the company to do business with the product supplier
Such product supplier may provide reasonable costs directly related to the training or presentation provided, such as venue costs, speaker fees and meals. The reasonable costs associated with providing such meals and refreshments should not be regarded as part of immaterial financial interests, and shall not be recorded.
The company shall not accept provision for the travel and accommodation associated with the training, seminars or presentations provided by any product supplier.
CONFLICT OF INTEREST POLICY STEP-BY-STEP
The policy framework for how RPS and employees deal with the management of conflicts of interest:
1. Identify and report the conflict
At all times during the process of rendering a financial service to a client you must assess whether you have an actual or potential interest that my prevent you from acting objectively, fairly and in the best interest of the client.
If you suspect that a conflict of interest situation may exist, you must report it to your relevant Key Individual (in writing), who will record it in the Conflict of Interest Register.
If the Key Individual is not available you must report it to the Compliance Officer (in writing).
2. Assessment of conflict
Once the conflict is reported, the Key Individual needs to assess whether a conflict exists and perform an evaluation in deciding on what steps need to be taken. This evaluation must include the following considerations:
- Whether it is possible to avoid the conflict and what steps should be taken to do so;
- If the conflict cannot be avoided, the reasons why;
- What mitigating measures can be put in place to control the conflict and lessen the effects thereof on the affected client;
- What disclosure is required to clients and determining when and how this disclosure will take place.
3. Avoid the conflict OR proceed and mitigate the conflict
After the decision is made that a conflict does exist and such evaluation has found the conflict can be avoided, this decision should be auctioned and the conflict should consequently be avoided by ending the situation or not proceeding with a prospective situation.
If, after an evaluation of all relevant factors, it is concluded that it is not feasible to avoid a conflict, it must be suitably managed. This entails the affected employee and Key Individual jointly developing mitigating measures to reduce any negative effect on the client and informing the client about the conflict and the mitigating steps taken by the company to reduce any possible negative effects.
The Key Individual must log all reasons, whether the conflict has been avoided or a decision has been taken to proceed with the conflict, in the Conflict of Interest Register.
4. Disclose the conflict
Disclosure is required where a conflict has been identified.
The following is required to be disclosed in writing to the client:
- What steps have been taken to avoid or where avoidance is not possible, to mitigate the conflict;
- Details of the relationship with a Third Party that has caused the conflict of interest;
- Details about any financial interest or ownership interest which RPS or an employee may have that would benefit RPS or such employee.
All disclosures must be clear, concise and effective to enable a client to have an informed opinion.
Examples that should generally be disclosed:
- If you or any associated person has an interest in respect of the financial product that you are rendering a financial service on
- If you or an associated person has an interest in or is related to the product supplier that you are rendering a financial service in respect of
- If your remuneration is affected by product sales
The company has various internal policies and controls in place to manage and mitigate possible conflict of interests:
1. Disclosure of Conflicts
A Representative will, in writing at the earliest reasonable opportunity disclose to a client any conflict of interest in respect of that client. The disclosure must include
- Measures taken, in accordance with the conflict of interest policy to avoid or mitigate the conflict
- Any ownership interest or financial interest, other than an immaterial financial interest, that the provider or representative may become eligible for
- The nature of any relationship or arrangement with a third party that gives rise to a conflict of interest, in sufficient detail to a client to enable a client to understand the exact nature of the relationship or arrangement and the conflict of interest.
A Representative must inform a client of the conflict of interest management policy and how it may be accessed.
2. Conflict of interest Register
Open for viewing on request. The register identifies all conflicts as well as the mitigation controls put in place to manage the conflict. The register is updated when a conflict becomes apparent, but reviewed at least on an annual basis.
3. Personal Interest Register
Documenting the business interests of a Responsible Person to the extent that such business interest might cause an actual or perceived conflict of interest.
4. Gift Register
Documenting all financial interests and immaterial financial interests offered to or received by a Responsible Person.
5. Comprehensive training
To be provided on the Conflict of Interest Policy to employees on an annual basis.
6. Informed Employees
All employees and representatives are required to read this policy and sign a statement to the effect that they have read and fully understand the provisions of the document and the application thereof. These statements are attached.
7. Compliance Officer
Will on an ad hoc basis check on financial records to ensure the policy is being complied with, specifically checking the accuracy of the Gift Register.
CONSEQUENCES OF NON-COMPLIANCE
The FAIS Act provides for penalties in the event that a person is found guilty of contravening the Act, or of non-compliance with the provisions of the Act. The penalty for non-compliance of specific provisions of the Act, is an amount of up to R1 million or a period of imprisonment for up to 10 years.
The Registrar of FAIS is empowered to refer instances of non-compliance to an Enforcement Committee that may impose administrative penalties on offenders.
The FAIS Act also gives the Registrar the powers to revoke the license of an FSP.
Employees’ failure to make the necessary disclosures could be seen as a transgression of the Code of Ethical Conduct and will be dealt with by the directors of the FSP.
Certain transgressions of this policy may result in civil or criminal prosecution.
All potential transgressions of this policy must be investigated fairly and objectively and be reported by the relevant compliance officer to the directors of the FSP.
a) in relation to a natural person, means –
i) a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of that person
ii) a child of that person, including a stepchild, adopted child and a child born out of wedlock
iii) a parent or stepparent of that person
iv) a person in respect of which that person is recognised in law or appointed by a Court as the person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person
v) a person who is the spouse, life partner or civil union partner of a person referred to in subparagraphs (ii) to (iv)
vi) a person who is in a commercial partnership with that person
b) in relation to a juristic person –
i) which is a company, means any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary
ii) which is a close corporation registered under the Close Corporations Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act
iii) which is not a company or a close corporation as referred to in subparagraphs (i) or (ii), means another juristic person which would have been a subsidiary or holding company of the first-mentioned juristic person –
aa) had such first-mentioned juristic person been a company or
bb) in the case where that other juristic person, too, is not a company, had both the first-mentioned juristic person and that other juristic person been a company
iv) means any person in accordance with whose directions or instructions the board of directors of or, in the case where such juristic person is not a company, the governing body of such juristic person is accustomed to act
c) in relation to any person –
i ) means any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which the governing body is accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph
ii) includes any trust controlled or administered by that person
“Conflict of interest” means any situation in which a person has an actual or potential interest that may, in rendering a financial service to a client:
a) influence the objective performance of their obligations towards such client or
b) prevent a person from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client, including but not limited to –
- a financial interest
- an ownership interest
- any relationship with a third party
“Employee”, for the purpose of this policy, will include:
a) all directors and full-time employees of the company (RPS)
b) all employees including contracted representatives
“FAIS” means the Financial Advisory and Intermediary Services Act, No. 37 of 2002.
“Fair value” means the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction (as set out in the reporting standards adopted in terms of the Companies Act (Act no 61 of 1973).
“Financial interest” means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic of foreign travel, hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than:
a) an ownership interest
b) training, that is not exclusively available to a selected group of providers or representatives, on –
i) products and legal matters relating to those products
ii) general financial and industry information
iii) specialised technological systems of a third party necessary for the rendering of a financial service
but excluding travel and accommodation associated with that training.
“FSP” means a Financial Services Provider.
“Financial services provider” (FSP) means any person, other than a representative, who as a regular feature of the business of such person –
a) furnishes advice or
b) furnishes advice and renders any intermediary service or
c) renders an intermediary service
“Financial service” means any service contemplated in paragraph (a), (b) or (c) of the definition of “financial services provider”, including any category of such services.
“Conflict of Interest Policy” means the Conflicts of Interest Management Policy for the company (FSP).
“CO” means the Compliance Officer.
“immaterial financial interest” means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by –
a) a representative of the company for that representative’s direct benefit
b) the company, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representatives
“Ownership interest” means:
a) any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than equity or an proprietary interest held as an approved nominee on behalf of another person and
b) includes any dividend, profit share or similar benefit derived from that equity or ownership interest
“Provider” means an authorised FSP registered as such with the FSB.
“Representative” means any person, including a person employed or mandated by such first-mentioned person, who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandate, but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity, which service –
a) does not require judgement on the part of the latter person or
b) does not lead a client to any specific transaction in respect of a financial product in response to general enquiries
“Third party” means:
a) a product supplier
b) another provider
c) an associate of a product supplier or a provider
d) a distribution channel
e) any person who in terms of an agreement or arrangement with a person referred to in paragraphs (a) to (d) above provides a financial interest to a provider or its representatives
LIST OF ASSOCIATES
Retirement Planning Services (Pty) Ltd has no associates.
Retirement Planning Services International (Pty) Ltd has no associates.
LIST OF OWNERSHIP INTERESTS
Names of a third party in which the FSP holds an ownership interest:
Retirement Planning Services (Pty) Ltd has no ownership interest in any third party.
Retirement Planning Services International (Pty) Ltd has no ownership interest in any third party.
Names of a third party that holds an ownership interest in the FSP:
Retirement Planning Services (Pty) Ltd Chrisandine Trust IT 1523/94, 100% shareholding
Retirement Planning Services International (Pty)Ltd Atalaya Trust IT 1900/2000, 40% shareholding
Value Investment Trust IT 1097/2005,