INTRODUCTION

Multrees offers custody and administration services to Clients and Customers, and can find itself in a situation where the interests of one Customer or Client may be in competition with those of another, or where the interests of a Customer or Client may be in competition with the interests of Multrees, or members of staff at Multrees.

It is Multrees’ policy to take all reasonable steps to identify and manage conflicts entailing a material risk of damage to a Customer’s interests.

Senior management within Multrees are responsible for ensuring that the systems, controls and procedures are adequate to identify and manage conflicts. Risk & Compliance assist in the identification and monitoring of actual and potential conflicts.

Scope

All employees, full-time, part-time and contractors / temporary, are within scope of the provisions of the policy. In scope conflicts are those between Multrees and Clients, Customers or Staff, and also between any of these parties.

When the policy refers to Customers it should, depending on context, be viewed as referring to Clients as well.

CONFLICTS OF INTEREST

In identifying conflicts, Multrees will consider, amongst other facts, whether Multrees (or its staff):

  • Is likely to make a financial gain or avoid a financial loss at the expense of the Customer;
  • Has an interest in the outcome of a service provided to the Customer or of a transaction carried out on behalf of the Customer, which is distinct from the Customer’s interest in that outcome;
  • Carries on the same business as the Customer;
  • Receives or may receive from a person other than the Customer, an inducement in relation to a service provided to the Customer in the form of monies, goods or services other than the standard commission or fee for that service;
  • Has an interest in the outcome of the selection of a supplier to Multrees outside standard commercial considerations (e.g. other inducements or outside links, in the case of staff members).
Identifying and Managing Conflicts of Interest

Multrees has arrangements in place to identify, prevent and manage actual or perceived conflicts of interest. These arrangements govern the activities of employees as well as ensuring that the activities of the firm are conducted appropriately to avoid conflicts of interest.

Multrees adopts a number of approaches to manage conflicts of interest; the following is a non-exhaustive list of these controls:

  • Segregation of duties (and supervision) to mitigate the ability of staff to gain from actual conflict situations;
  • Remuneration policy reviewed by Risk & Compliance and approved by the Remuneration Committee, to align where relevant the interests of staff, Multrees and Customers, and mitigate the risk of these being in direct opposition to each other;
  • Periodic attestations by staff to promote ongoing compliance;
  • Induction training given on conflicts and periodic reminders issued;
  • Procurement policy reviewed by Finance and suppliers monitored for potential conflicts of interest;
  • Periodic monitoring of conflicts and attestations.
Disclosure of Conflicts

Where Multrees considers that the arrangements in place to manage potential or actual conflicts interest are not sufficient to avoid material risk of damage to a Customer’s interest, Multrees will disclose the conflict to the Customer before undertaking any business for the Customer and obtain their consent to act.

If the Customer does not consent, then Multrees will refuse to act for that Customer or for the particular business which causes the conflict.

Enforcement

Failure to adhere to the terms of this policy may be regarded as a disciplinary offence and would be subject to the relevant HR policy.

GIFTS & HOSPITALITY
Objective

The objective of this policy section is to ensure that Multrees conducts all of its business on a sound and ethical basis, free from outside influence and in full compliance with all applicable legislation (including the Bribery Act 2010 and any accompanying guidance issued from time to time by the Ministry of Justice).

It is the Company’s policy not to allow staff to give or receive gifts and/or hospitality which might be perceived as compromising their personal judgement or integrity. Staff are prohibited from using their position to further either their own personal interests or the personal interests of others.

This policy lays down the Company’s underlying principles of accepting and refusing gifts and/or hospitality, as well as setting out the procedure to be followed for the recording of such instances.

This policy prescribes the amounts of gifts and/or hospitality which staff are permitted to accept. This policy also imposes an obligation on all staff to ensure that any such gifts and/or hospitality are recorded in the appropriate manner. All gifts and/or hospitality given and received, even if they fall outside of the limits detailed in the policy, should be recorded.

In this context, a gift means any item, irrespective of value, which is received by a member of staff from a third party. Hospitality includes invitations to attend events (including sporting, shopping and cultural events), meals outside working hours or other similar occasions.

Causes of Conflict

The following are examples of instances that are regarded as potential causes of conflict and unlikely to be approved:

  • Gifts and/or hospitality at times when business decisions are being made (for instance on tenders, other selection of new suppliers, contract renewals or during project evaluation phases);
  • Cash, cash equivalents (e.g. gift vouchers) or loans;
  • Personal services, such as use of another company’s vehicles, use of holiday homes, home improvements, personal discounts, etc.;
  • Anything where the person offering the gift or hospitality is not present (e.g. tickets to an event where the person paying does not attend);
  • Anything involving an employee’s partner or other family members;
  • Paying for a gift and/or hospitality personally so the employee avoids having to declare it;
  • Any gift and/or hospitality that involves significant conference fees, travel and/or accommodation; if staff have a genuine business need to attend or stay overnight, Multrees should meet all the costs involved;
  • Any gift or hospitality involving a sporting event, even if in a charitable or teambuilding context.
  • Any gift offered to, or accepted from, government officials or representatives, politicians or political parties;
Gifts / Hospitality Received

If the member of staff wishes to accept a gift or hospitality, the following principles must be applied:

  • The member of staff must have a clear business reason, rather than it being for personal benefit;
  • The gift or hospitality should be timed appropriately (e.g. not before or during a tender or contract renewal);
  • The member of staff should consider the intentions behind the offer (e.g. would accepting this gift or hospitality influence, or appear to influence, any business decision);
Charity Donations

Staff may ask clients and/or suppliers for charitable donations for sponsored events being undertaken, and similarly the Company itself and/or its staff may sponsor Clients and/or suppliers for charitable events.

Enforcement

Failure to adhere to the terms of this policy may be regarded as a disciplinary offence and would be subject to the relevant HR policy.

ANTI-BRIBERY & CORRUPTION
Principle

Multrees conducts its business with high ethical standards and with openness and transparency.

Multrees prohibits the offering, giving, solicitation and acceptance of bribes, whether cash or other inducements:

  • To or from any person or company;
  • In order to gain any commercial, contractual or regulatory advantage for the Firm in a way that is unethical;
  • Or in order to gain any personal advantage, financial or otherwise, for the individual or anyone connected with the individual.

In addition to being unethical, such behaviour is potentially illegal or would constitute a regulatory breach.

UK Bribery Act 2010

The UK Bribery Act 2010 is the applicable legislation in relation to bribery and corruption. A bribe is an inducement or reward offered, promised or provided in order to improperly gain any commercial, contractual, regulatory or personal advantage, which may constitute an offence under the Act, namely: giving or offering a bribe; receiving or requesting a bribe; or bribing a foreign public official.

Employee Responsibility

The prevention, detection and reporting of bribery is the responsibility of all employees of Multrees.

Monitoring

Finance provides oversight of corporate payments and staff expenses, and investigates any items that appear irregular or unusual.

Allowable Activity

This policy is not intended to prohibit the following provided they are carried out in line with the Gifts & Hospitality section of this overall policy:

  • Normal and appropriate hospitality;
  • Giving of a gifts and entertainment;
  • Sponsorship for a charity event or activity.
Enforcement

Failure to adhere to the terms of this policy may be regarded as a disciplinary offence and would be subject to the relevant HR policy.

INSIDE INFORMATION / ETHICAL WALLS

The risk of any Multrees staff member becoming aware of insider information or Multrees needing to set up Ethical Walls, is very low. However, in order to protect the integrity of the financial markets, Multrees requires a policy to outline how these situations would be dealt with.

Ethical Wall

An Ethical Wall is a process for avoiding conflicts of interest by limiting disclosure of information to certain individuals within a firm, in effect keeping a separation between the holders of information and colleagues who represent interests or hold opinions which conflict.

Inside Information

This is precise information that is not generally available and that a reasonable investor would use to help it make investment decisions. It is also information that, if generally available, would be likely to significantly affect the price of an investment. Information from research or analysis is deemed to be generally available, and is not inside information.

Principle of Confidentiality

The first and main responsibility for staff is to respect the confidentiality of the information within an Ethical Wall.

Client confidentiality is a standard always maintained at Multrees and is therefore already a part of the culture whether the information to hand is ‘confidential’, ‘inside information’ or otherwise.

Additionally, Multrees and individual employees are obliged by regulation and the law not to disclose any inside information or encourage others to trade on it. As well as being a part of the Conflicts of Interest policy, this forms a part of the terms of employment. Ultimate legal sanctions for insider trading are severe (including potential criminal liability, i.e., a fine and imprisonment of up to ten years, prohibition of trading for up to five years, potential civil liability i.e. an unlimited fine and the liability to compensate any third party who has suffered a loss or loss of profit).

If staff have inside information, however received, they need to be extremely careful not to signal, indicate or make reference to such information to other employees in the course of their normal communications. This could be considered to be ’tipping off’ and may constitute a breach of insider dealing law.

If discussion of sensitive issues is inevitable, do not discuss sensitive issues outside of the Ethical Walls; avoid taking part in any discussions that arise relating to subjects that are currently sensitive.

Note: Staff duty to maintain client confidentiality may only be waived when it conflicts with legal or regulatory requirements, for example making regulatory reports. Such disclosures should be made via Risk & Compliance.

Duty to report suspicious transactions

Any person professionally arranging transactions in financial instruments who reasonably suspects that a transaction or orders to trade might constitute insider dealing or market manipulation is under an obligation to notify the FCA of this without delay. As a person professionally arranging transactions, Multrees must submit such a report to the FCA

PERSONAL ACCOUNT DEALING
Potential Conflicts

Although Multrees primarily carries out custody and administration services for clients and underlying customers, a subset of clients also use Multrees for Execution Services, facilitating trading in investments such as equities, bonds or exchange traded funds. However, the operational processes for Execution Services mean that the opportunities for staff to front run or pre-position ahead of customers is limited.

Scope

This policy applies to all Multrees employees (permanent, temporary and contract), it does not apply to non-executive directors as the activities carried out by Multrees will not give rise to potential conflicts with non-executive directors for PA dealing.

Connected Persons
Connected Persons are defined as the following:

  • Spouses;
  • Partners;
  • Minor children;

Any other person over whose financial affairs the staff member may be considered to have influence (e.g. power of attorney).

Staff must not influence any Connected Person to enter into a prohibited transaction or a transaction that they would otherwise be required to report. As such, Connected Persons are also subject to the restrictions and reporting requirements contained in this policy.

Any membership of an investment club must be declared to Risk & Compliance, together with a copy of the relevant membership agreement. Unless they operate on a fully discretionary basis, any dealings by the club will be subject to the same dealing requirements applicable to staff.

Acting as trustee or settlor of a trust, where the staff member or connected person has a beneficial interest, is also in scope of this policy.

Securities
Transactions in the following asset classes are in scope of this policy:

  • Listed assets – e.g. stocks, exchange traded funds, investment trusts;
  • Bonds, excluding government bonds (e.g. Gilts);
  • Derivatives where the underlying is an asset covered above (including linked spread bets).

Exemptions
The personal account dealing requirements do not apply to:

  • Dealings on any investment accounts run on a fully discretionary basis (i.e. where the staff member has no influence on the investment decisions);
  • Pensions (provided assets are not in the asset classes covered above);
  • Life policies (provided assets are not in the asset classes covered above);
  • Commodities;
  • Foreign Exchange, including Cryptocurrency;
  • Dealings in regulated collective investment schemes (e.g. unit trusts and OEICS), - N.B. Investment Trusts are not regulated collective investment schemes;
  • Vesting or exercise of employee share options;
  • Shares in unlisted companies (e.g. Multrees shares);
  • Corporate action decisions, including reinvestment of dividends.

Mandatory transactions, such as those covered below, are exempted from the Prohibitions and pre-authorisation requirements, but must still be reported post-transaction with an explanation:

  • Disposals due to Multrees staff being subject to another firm’s policies (as connected persons of employees of other firms);
  • Investments by connected persons as part of incentive schemes.
Prohibitions

Where clients have submitted orders for execution by Multrees as part of the Execution Services offering, staff are prohibited in dealing in these securities between the time the order is received and 24 hours after the order is filled.

Where relevant, Risk & Compliance will incorporate awareness of who has inside information into any decisions to approve / prohibit personal account dealing. Staff in possession of inside information will be prohibited from dealing in the applicable securities until this information is in the public domain.

Monitoring

Personal account transactions are independently authorised in accordance with internal rules and Compliance maintain a log of personal deals which is monitored for evidence of any conflicts or potential conflicts. This may include additional retrospective comparison of staff deals against client orders via Execution Services.

Enforcement

Failure to adhere to the terms of this policy may be regarded as a disciplinary offence, and would be subject to the relevant HR policy. As well as the potential sanctions set out in that policy, other sanctions could be considered including:

  • Banning further PA dealing;
  • Forced sale of assets;
  • Donation of profit to charity.