MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVE

 

Summary of Conflicts Management Arrangements

ShareCrazy.com Ltd (SC) (as Appointed Representatives of Hoodless Brennan Plc (HB)) is required by the Markets in Financial Instruments Directive (MiFID) which has been adopted into UK legislation, to provide you with a summary of our arrangements to manage our Conflicts of Interest.

HB undertakes a number of business activities which includes advising and dealing in investments for Retail Customers, corporate finance and broking, institutional sales, research and market making. A number of potential conflicts of interest could arise within and between these various activities.

We are therefore required to:  

Take all reasonable steps to identify conflicts of interest between (i) HB or a linked entity and its clients or (ii) one client and another.

Maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients.

Where HB produces “externally facing” investment research, put in place appropriate information controls.

Disclose the general nature and/or the sources of the conflicts of interest for the client, where the arrangements to manage a conflict of interest are not sufficient to ensure, with reasonable confidence, that the risks of damage to the interests of a client will be prevented.

 

Identification of Conflicts
When identifying potential conflicts of interest, HB will take into account whether SC, the firm or an employee:

Is likely to make a financial gain, or avoid a loss, at the expense of the client.

Has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome.

Has a financial or other incentive to favour the interests of another client or group of clients over the interests of the client.

Carries on the same business as the client.

Receives or will receive from a person other than the client an inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard commission or fee for that service.

 

Management of Conflicts
HB maintains a number of policies and procedures, which includes a documented policy of independence, which applies whenever its employees provide advice to any of our customers or recommends a transaction.  This requires employees to disregard any interest in the transaction that they or HB may have, in order to ensure that our clients are given suitable advice. We also maintain physical separation between various departments such that Corporate Finance, Research and Institutional sales are all operate separately from each other, as do Broking and the Market Making and Agency Dealing functions.

Where it is not practical to effectively manage such conflicts we ensure that they are properly disclosed to customers, and we will decline to act for customers should it be necessary.

 

Chinese Walls
These are the arrangements we have in place to restrict access to information held in one part of the business from employees in other departments.  Our Chinese Wall Procedures sets out in detail the restrictions that are in place to restrict, control and manage the flow of information between the Corporate Finance Department, Analysts, Broking and Institutional Sales, Market Making, Settlements and Finance.

This includes physical restriction on the staff allowed access to the Corporate Finance Department, and includes restrictions on access to the data held within that department. The procedures dictate that those staff who are required to be involved in any transaction will be privy to information or ‘brought over the Chinese Wall’.  The market makers are segregated from the other departments and access to their book positions is heavily restricted. All staff are prohibited from disclosing information except as detailed in the procedures.

 

General Issues

Personal Account Dealing
Personal Account Dealing by HB personnel must be in strict compliance with our policies and procedures to ensure adherence with all relevant regulation and legislation, both for the benefit of clients and the protection of employees. The procedures are to ensure that employees’ interests do not conflict with those of our clients and adherence with these is strictly monitored.

 

Remuneration Policy
HB’s remuneration policies are designed to reflect employees experience and performance, balanced with the requirement to ensure that their remuneration does not conflict with their obligations to our clients.  Where employees’ remuneration reflects an element of commission received for transactions undertaken for clients, procedures are in place to monitor the suitability of their recommendations.

 

Inducements/gifts
The giving or receiving gifts or other inducements may compromise or conflict with the recipient’s obligations to his clients.  Therefore employees are required to comply with our strict policy regarding the reporting and approval of all gifts and hospitality.

 

Outside Interests
Employees are required to notify the firm of any outside interest. Any disclosed outside interests will be reviewed by the Head of Compliance and if necessary reported to the CEO who will consider the potential for conflicts of interest before permitting the continuance of any such outside interest.

 

Review
All polices and procedures for identification and management of conflicts of interest are, as a minimum, subject to annual review and any significant issues will be reported to the Executive Management Committee and to the Board as necessary.