The following summarises the procedures designed to minimise conflicts of interest which may be harmful to Rocq Capital and also to maintain a high level of confidentiality which will protect your interests.
What is a conflict of interest
A conflict of interest arises in a situation where an employee with responsibility to act in the interests of others may be affected in their actions by a personal interest (including business interest) or association of their own. In all cases an employee must be careful not to subordinate the interests of a client to those of another party, including Rocq Capital or the employee. The main risks arising from conflicts of interest are (i) the quality, and indeed validity, of regulatory decisions may be adversely affected (ii) the efficiency and speed of regulatory decision-taking may be impeded (iii) and regulatory information may be used for private or commercial gain, reducing the willingness of others to supply it.
Conflicts of ‘material’ interest can arise between: Rocq Capital and its clients, a Rocq Capital employee and its clients and between two clients. An interest is “material” if it is reasonable to conclude that an employee, assuming they did not disregard such an interest could be induced by the interest to make a recommendation or enter into a transaction knowing it to be contrary to the client's best interests or, without giving proper consideration of whether or not it is in the client's interests.
Rocq Capital maintains various protocols and procedures, including this policy and takes all the required effective steps to identify conflicts of interest. Employees are provided with training with regards to the identification and management of conflicts.
Rocq Capital employees must ensure that any conflict of interest to which they may personally be subject does not affect the impartiality of regulatory action or create a risk that that action could be called into question. If they are in possession of information received in connection with any regulatory function they must not misuse this information. Rocq Capital ensures employees firstly recognise and (if necessary) escalate any actual or potential conflicts of interest (financial or otherwise) which may give rise to influencing any action taken or judgement made.
Mitigation of Conflicts
Employees are required to report potential material conflicts of interest to the directors and to the Compliance Officer (as appropriate) who will in turn ensure clients are treated fairly by applying various safeguards. These safeguards will be applied relative to the nature and directness of an employee’s interest and the nature and importance of the conflict to which it gives rise. The various safeguards that may be applied include (amongst others):
- Using information barriers – these include rules, procedures, physical segregation and organisational arrangements designed to ensure information in one part of Rocq Capital’s business is not shared with another part. These information barriers maybe used where for example an employee comes into contact with price sensitive information which might require Rocq Capital to impose restrictions on their ability to deal in the security concerned on behalf of clients and/or restrictions on Personal Account trading by certain employees. Where such safeguard is in place, Rocq Capital and its employees will be excused of failing to use information known by such arrangement for the benefit of its clients.
- Disclosure of the relative information, enabling action to be taken to deal with it without affecting the quality or promptness of regulatory action. Disclosures can be made (i) to the parties affected (ii) to the Compliance Officer (iii) on disclosure records (iv) on board reports or the financial statements (on the recommendation of the auditor) and / or (v) disclosure to the GFSC in extreme circumstances.
- Ensuring third party providers do not have a material shareholding nor financial interest in Roc Capital (or vice versa) in order to be able to influence any operating decisions to the detriment of client’s interests.
- Operating two divisions: asset management and stock broking, ensuring activities are separately undertaken by RCS and RCM both separately licenced and regulated by the GFSC respectively. Rocq Capital operates separate functional and physical segregation between the two divisions to prevent simultaneous involvement of an employee in separate services and activities which may impair proper management of conflicts.
- Retaining, regularly updating and closely monitoring lists of ‘inside information’ and records of services carried out where a conflict of interest has arisen or may arise.
- Prevention of employees accepting any employment, outside business interests or business opportunity without prior approval of the board. The approval process builds in an assessment of the potential for conflicts of interest.
- Restricting the receipt of offers of benefits (whether monetary or another form) including inducements, gifts and entertainment as such are capable of giving risk to a conflict of interest such as preferential treatment. Rocq Capital places limits on the levels of gifts and entertainment our employees may receive.
- Rocq Capital has a client handling policy and has in place procedures for monitoring conflicts arising from carrying out client’s orders and matching with that of another client and allocating investments.
- Ensuring (amongst others) that employees must disregard any of the following interests: any personal interests (including family or connected persons) and any existing, proposed or prospective business relationship between Rocq Capital and any third party.
- Where disclosure alone is insufficient, and the problem concerns the quality or validity of regulatory decision-taking, the directors and/ or Compliance Officer may request withdrawal of the conflicted employee from involvement in the matter concerned, clearly establish non-involvement and be prevented access to the information. In some cases, the employee may need to stand down from a position they hold excluding them from distribution of documents, or attendance at meetings on the subject concerned.
Disclosure and Declination to Act
Where the above mitigation arrangements, safeguards and related organisational and administrative arrangements are unable to prevent or manage conflicts sufficiently Rocq Capital may decide to decline to act where there is residual risk of damage to the interests of any client.