WHERE TO FIND IT

Definitions … pg2

1. EXECUTIVE SUMMARY

1.1. Purpose … pg4
1.2. Objectives … pg4
1.3. Scope … pg4

2. POLICY GOVERNANCE

2.1. Implementation … pg5
2.2. Management Process … pg5
2.2.1. Monitoring, Reporting and Disclosure … pg5
2.2.2. Actions for Non-Compliance … pg6
2.3. Related Documentation Supporting this Policy … pg6

3. PROVISIONS OF THE POLICY

3.1. Effective Arrangements … pg6
3.2. Roles and Responsibilities … pg7

4. LEGAL ENTITIES … pg8

5. CONTACT DETAILS … pg8

CONFLICT OF INTEREST MANAGEMENT POLICY

Definitions

Conflict of interests:

Conflicts may arise where:

• the interests of Imnkanyezi Yezizwe Trading and Projects (Pty) Ltd (herein referred to as Imnkanyezi) or that of its legal entity potentially conflict with those of a client for example where Imnkanyezi is paid more than regulated commission by one particular product supplier in return of submission of more business to that product supplier; where Imnkanyezi is likely to make a financial gain or avoid a financial loss at the expense of the client; where an inducement will be paid to Imnkanyezi by a third party in relation to the service provided to the client (other than standard commissions and fees); where there is a financial incentive to favour the interest of one client over another;
• the interests of one client or potential client conflicts with those of another;
• Imnkanyezi has obtained confidential information relating to an existing or former client, which may be of interest to another one of its legal entity; and
• any situation in which a financial services provider or a representative has an actual or potential interest that may, in rendering a financial service to a client
  • (a) Influence the objective performance of his, her or its obligations to that client or
  • (b) Prevent a provider or representative 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
    • (i) a financial interest;
    • (ii) an ownership interest; and
    • (iii) any relationship with a third party;

Financial interest:

Means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or 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;

Financial services:

Any service contemplated in paragraph (a), (b) or (c) of the definition of ‘financial services provider’, including any category of such services;

Financial Service Provider:

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
• (a) Renders an intermediary service;

Representative:

Any 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 mandatory agreement, 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 judgment 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 inquiries;

Third Party:

Means

• (a) A product supplier;
• (b) Another provider;
• (c) An associate of a product supplier or a provider;
• (d) A distribution channel; and
• (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.

1. EXECUTIVE SUMMARY

1.1 Purpose

The management and avoidance of all potential conflicts of interest is not only good business practice as it avoids legal liability and reputation risk, but in addition it is a requirement stipulated in the General Code of Conduct for authorised financial services providers and representatives. As an authorised financial services provider, Imnkanyezi (herein referred to as Imnkanyezi) is therefore required to ensure that all existing and potential conflicts of interest are properly managed if allowed to exist or altogether avoided if possible. Proper management of conflicts of interest will therefore support compliance with the Financial Advisory and Intermediary Services Act. (Act 37 of 2002 also known as FAIS) that regulates the management of Conflicts of Interest in relation to the provision of Financial Services.

The risk of conflicts of interest not being properly managed and controlled is, amongst others, that customers may not be adequately protected particularly where Imnkanyezi’s key individuals and representatives do not act with due care and diligence and in the best interest of their clients, In addition, clients’ confidence in Imnkanyezi’s services could be undermined and legal claims may follow and this may impact negatively on Imnkanyezi’s licence authorisation.

Conflicts may arise where: the interests of the Imnkanyezi, as a financial services provider, potentially conflict with those of a client for example where;

• Imnkanyezi is exclusively paid incentives in addition to the regulated commission by a particular product supplier(s) as a way to enhance performance by the providers;
• The employees, i.e. Key individuals and/or representatives receive indirect incentives such as sports complimentary tickets, golf days, entertainment tickets, etc;
• An all expenses paid business trips which is influenced by the number of clients which Imnkanyezi brings to the product supplier(s);
• Planned lunch invites which are paid for by the product supplier(s); and/or
• Anything that may influence the objectivity of the Key individual and/or that of the representatives to consider NOT the interests of the client but his personal interests or that of the Financial Services Provider.

1.2 Objectives

The objective of this policy is to provide a framework with regard to the avoidance and management of conflicts of interest in Imnkanyezi in order to:

• Ensure compliance with local regulatory requirements;
• Avoid legal liability and reputation risk arising from conflicts of interest; and
• Protecting the confidentiality of client information and by so doing maintaining confidence in the financial markets.

1.3 Scope

This policy applies to Imnkanyezi, inclusive of all the financial services providers (legal entities) for which the Imnkanyezi provides Key Individual services as stipulated in the FAIS Act. Provision of Key Individual Services refers to the fact that Mr Lawrence Imnkanyezi is a Key Individual of legal entity which would not have qualified for a licence from the Financial Services Board had it not been for him acting as a Key Individual for such an entity.

This policy also applies to all employees and/or representatives of the aforementioned legal entities. For the purposes of this policy, when identifying conflicts, the interests of Imnkanyezi includes those of the other legal entities and its employees and/or appointed representatives providing services to clients on behalf of Imnkanyezi or those providing services which are supervised and signed for by Mr. Imnkanyezi as a Key Individual.

2. POLICY GOVERNANCE

2.1 Implementation

Management of the affected financial services providers is responsible for the implementation of the policy and FSP specific controls in their own areas. Compliance will facilitate and monitor the implementation of the policy.

2.2 Management Process

Appointed Compliance Officers of these legal entities will provide a methodology tool to identify, manage and avoid conflicts of interest. Imnkanyezi and its legal entities will be responsible for implementation of procedures within their respective businesses, which procedures must be contained in a Compliance Risk Management Plan of the FAIS General Code of Conduct and in respect of financial services being provided must detail the FSP specific measures:

• For the avoidance and /or mitigation of conflicts of interest;
• For the disclosure of conflicts of interest;
• For providing mechanisms for the identification of conflicts of interests or potential conflicts of interest.

The conflict of interest policy and the record of the kinds of services and activities undertaken by Imnkanyezi and the afore referred legal entities, which might give rise to a potential conflict of interest must be retained for at least five years, and in line with Record Management Policies, together with any changes to those documents.

The Gift and entertainment policy is also relevant in the context of the management of conflicts of interest and that policy must be read in conjunction with this policy in order to gain a full understanding of the management of Conflicts of Interest.

2.2.1 Monitoring, Reporting and Disclosure

The appointed Compliance Officers and management of Imnkanyezi and the respective legal entities are responsible for monitoring compliance with the policy within their specific businesses. Compliance findings are reported as detailed in 2.2.2.below.

Any breaches of the requirements of this policy should be reported by Compliance to management and visa versa, should management, by means of observation monitoring, realise non-compliance to this policy requirements. They should bring such instance of non-compliance to the attention of the Compliance Officer with the aim of finding guidance as to rectifying such non-compliance. All transgressions of this policy which lead to material non-compliance with the FAIS Act places a duty on compliance to report the material non-compliance to the Regulator, the Financial Services Board.

2.2.2 Actions for Non-Compliance

The actions for non-compliance with this policy and business specific standards will be governed by the compliance structure of risk management, that is, instances of non-compliance will be reported to the FSP management. Significant instances of non-compliance may result in disciplinary action against the parties concerned.

Instances which represent significant breaches of the implemented control measures will also be included in the quarterly reports provided to management, by Compliance via the compliance monitoring report.

2.3 Related Documentation Supporting this Policy

The Conflict of Interests Policy as well as the Conflicts of Interest methodology (that contain detailed guidance in respect of the appropriate procedures and controls to manage Conflicts of Interests) must be read in conjunction with the Compliance Risk Management Plan: FAIS General Code of Conduct

3. PROVISIONS OF THE POLICY

3.1 Effective arrangements

It is the responsibility of Imnkanyezi and its legal entities to:

• Implement appropriate procedures which enable all conflicts of interest, real or perceived, to be identified;
• Provide guidance to manage conflicts by appropriate measures such as separation of functions, information barriers (e.g. Chinese Walls), and escalation and exit procedures;
• prevent legal liability or regulatory breach and protect the reputation of Imnkanyezi by avoiding or managing conflict of interest situations, providing appropriate procedures to consider and protect the interests of all parties;

The organisational and administrative arrangements to manage conflicts must be designed to ensure that, when undertaking activities that involve a potential conflict of interest, relevant persons carry out those activities at an appropriate level of independence. Controls should be put in place by each affected business to ensure the requisite level of independence and should include, as a minimum and where relevant, the following:

• Effective procedures to prevent or control the exchange of information where that exchange of information may harm the interests of one or more clients;
• Separate supervision of relevant persons whose principal functions involve activities that might give rise to a conflict of interest;
• The removal of any direct link with any product suppliers that intentionally contravene the provisions of the General Code of Conduct
• The removal of any direct link with any legal entity which intentionally contravene the provisions of this policy
• Measures to disclose Conflicts of Interests in the circumstances where conflicts cannot be avoided; and
• Where relevant, appropriate measures in relation to the management of an offering of securities as part of a corporate finance business activity;
• Involvement of senior management and the utilisation of reporting and management information as deemed appropriate for each business;
• Such arrangements may not be effective in all circumstances and in certain instances there may be no option other than to decline to act.

The use of ‘Chinese walls’ (i.e. an information barrier) is an acceptable conflicts management measure so long as reasonable steps are taken to ensure that the arrangement remains effective and is adequately monitored. Over-reliance on disclosure, without adequate consideration as to how conflicts may appropriately be managed, is not permitted.

3.2. Roles and Responsibilities

In order for the role out of the conflict of interest policy to be a success, it is of utmost importance for all the parties to have the knowledge of what their roles and responsibilities are and ensure that they execute them.

3.1.1. Imnkanyezi

• Implement appropriate procedures to identify all conflicts of interest, real or perceived that arise or may arise, including those that arise as a result of services provided by the other legal entities.
• Where a financial service is provided, manage conflicts of interest by appropriate measures such as information barriers (Chinese Walls), separation of functions, exit procedures and acceptance of regulated commission and incentive schemes not based on the quantity of business or giving preference by giving preference to a specific product supplier or a specific product.
• Maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interests from giving rise to a material risk of damage to the interests of its clients.
• Prevent non-compliance with relevant regulatory requirements and protect the reputation of Imnkanyezi, by implementing appropriate procedures to manage or avoid conflicts of interests that consider and protect the interests of all parties.
• Establish, maintain and regularly update a record of the kinds of services and activities undertaken by the businesses which might give rise to a conflict of interest. This record must be updated at least annually and must document the reasons for the determination. The record should also be updated where there are significant changes to the nature of services and activities undertaken, the structure of the business and new product launches.
• Make disclosure of the nature of a conflict to a client before undertaking business for the client in cases where the measures to manage conflicts are not considered sufficient to ensure, with reasonable confidence, that risks of damage to the interests of a client will be prevented. This disclosure must be made in a durable medium and in sufficient detail to enable the client to make an informed decision about the relevant service or product. Management of each business are responsible for determining which conflicts are likely to result in a material risk of damage or detriment to a client’s interests. For a conflict to exist there must be a possible disadvantage or loss to a client or potential client.
• Where a Financial Service is provided, Imnkanyezi must maintain and keep up to date their list of Associates and Third Parties to ensure that accurate disclosure of all interests received is made and inform Group Secretariat of any changes where relevant.
• Ensure that all employees are trained on the requirements of the Policy as well as the regulatory requirements.

3.1.2. Representatives of FSPs

The representatives have a responsibility to ensure that all FAIS financial services (advice and intermediary services) are in the best interest of the client and not for the personal gain of the Representative, directly or indirectly by following the business unit specific standards and procedures.

3.1.3. Compliance

Compliance must:

• Establish a Group Standard to identify, manage and/or avoid conflicts of interest Group-wide;
• Provide relevant input and guidance to the business unit or support function;
• Review adherence to this policy and report all breaches to the appropriate level of the governance structure;
• Ensure publication of this policy in an appropriate media;
• Provide the necessary procedure and awareness to all staff on how to deal with requests for a copy of the policy; and
• Will facilitate the development of awareness training for all employees.

4. LEGAL ENTITIES

There are no legal entities that Imnkanyezi or the actual key individual of Imnkanyezi has agreed to provide services to such an entity as a key individual for the purposes of provision of financial services to clients.

5. CONTACT DETAILS

Imnkanyezi Yesizwe : 031 201 7585