Conflicts of Interest Prevention and Management Policy

Vector Asset Management S.A. (“VAM” or “the Company”) may face situations in which the client’s interests are in conflict with those of another client (Funds or Sub-Funds) or of Vector Asset Management S.A., or of the investors into the Funds.

The Company is structured and organized in such a way to restrict as much as possible the risk of those potential conflict of interest.

Vector Asset management has established an effective conflicts of interest policy and maintains effective organizational and administrative arrangements in accordance with the applicable regulations, in order to prevent situations involving conflicts of interests and resolve such situations if they could arise.

The procedures and steps put in place in order to manage conflicts of interest ensure that the relevant persons engaged in different activities likely to cause a conflict of interest, carry out those activities independently with regards to the size and activities of the Company and to the significance of the risk to the interests of clients.

WHAT IS A CONFLICT OF INTEREST?

A conflict of interest occurs when a person or entity in a position of trust or responsibility (such as a financial institution or its employees) has competing interests that could affect their professional judgment, decision-making, or actions, in a way that may harm the interests of their clients.

When identifying the types of conflicts of interest that arise in the course of providing services and activities and whose existence may damage the interests of a Fund, Vector Asset Management shall take into account, by way of minimum criteria, the question of whether the company or a relevant person, or a person directly or indirectly linked to the company by way of control, is in any of the following situations, whether as a result of providing collective portfolio management activities or otherwise:

a) the company or that person is likely to make a financial gain, or avoid a financial loss, at the expense of the Funds

b) the company or that person has an interest in the outcome of a service or an activity provided to the Funds or another client or of a transaction carried out on behalf of the Funds or another client, which is distinct from the Fund’s interest in that outcome

c) the company or that person has a financial or other incentive to favour the interests of another client or group of clients over the interests of the Funds

d) the company or that person carries on the same activities for the Funds and for another client or clients which are not the Funds

e) the company or that person receives or will receive from a person other than the Funds an inducement in relation to collective portfolio management activities provided to the Funds, in the form of monies, goods or services, other than the standard commission or fee for that service.  

MEASURES TAKEN BY VAM TO IDENTIFY CONFLICTS OF INTEREST

VAM appropriately anticipates and manages conflicts of interest that could result from the different services offered by the Company to avoid them prejudicing the interests of its clients.
In that respect, the Company maintains and implements internal provisions on an administrative and organizational level that account for the different services and products proposed, a wide range of business models and applicable legal requirements.

In order to prevent conflicts of interest, the Company has adopted the following preventative steps:

- Automatic use of outsourcing for the activities of central administration (NAV calculation, transfer agent, keeping of registry) and distribution constitutes a preventative step by circumnavigating direct actions by employees or increasing the level of supervision.

- the depositary bank for the Fund is strictly independent from the management company

-The Company has adopted internal organization measures aimed at controlling, managing or restricting in an appropriately measured way the flow of privileged information between different persons of the Company. The Company only supplies confidential information to third parties where required and authorized to do so by law or regulations and/or if this is provided for in the terms of the provision of the requested services. Confidential information regarding a client shall only be shared internally as required unless other provisions have been agreed with the client.

-Internal controls, particularly those covering the personal transactions of staff, ensures this compliance and also aids the prevention of potential conflicts of interest.

-There is always a separation between the interests of the company and the private interests of its staff. The conflicts between the interests of the company and the private interests of a staff member may arise when a staff member accepts a complementary activity with a client or they undertake professional activity for commercial entities operating in the same market as that of the Company.

-Appropriate trainings are provided to relevant employee to ensure that they are fully aware of their responsibilities and obligations

-Employees of the Company shall avoid at all times the use of privileged information when undertaking transactions and shall comply with the Company's Code of Conduct with regard to their personal transactions.

-The management fees received from underlying UCIs by the Company are transferred in full to the Sub-Funds which made the investment. In case of small amounts to be repaid, the Company may decide not to reimburse the Fund which made the investment.

-The Company does not offer, give, solicit or accept gifts or invitations that are considered to be a source of conflict of interest with regard to obligations towards investors.

The development and implementation of policies and procedures such as procedures for the correct conduct of business, product approval process, best execution, management of clients' orders, search for investments, individual behavior, execution of personal transactions, external activities, benefits received (inducements), gifts and invitations contribute to the prevention of conflict of interest.
Notwithstanding the precautions taken to prevent these conflicts, the Company establishes a register of potential conflicts identified and measures taken to avoid or limit the occurrence or impact.

MANAGEMENT OF CONFLICTS OF INTEREST

The Company’s management guarantees the application of the conflict-of-interest policy. It defines and applies the implementation procedures for updating the policy and for keeping and managing the conflicts of interest register. The Board is also responsible for establishing extra or alternative steps, where the policy is not sufficient to prevent harm occurring to the interests of the undertakings for collective investment managed.

All members of staff must inform the Compliance Officer if a conflict of interest, or potential one, appears.

Each proven conflict of interest is recorded in a register distinct from that of potential conflicts of interest.

All of the Company’s clients can request a copy of this policy in writing. Any proven conflict of interest which is capable of causing major harm to the interests of a Fund will be communicated to shareholders or unitholders of the Fund in question. In this case, the Company will provide the relevant information to the parties concerned by whichever durable means of communication is considered to be appropriate.