This policy details how C&M ASSET MANAGEMENT, INC (the ‘Firm’) will identify and manage conflicts of interest in respect of its business activities.
The Firm is authorised by the Securities Exchange Commission (‘SEC’) and, as such, will act in accordance to the Conflicts of Interest rules as defined in the SEC Handbook, which will take precedence over the requirements of this policy.
This policy will be reviewed regularly, at least once a year, and amended as considered necessary by the Firm's Management Body in the event of changing circumstances or regulations.
The Board of the Firm is responsible for ensuring that its systems, controls and procedures are able to identify, manage and control or prevent any potential and actual conflicts of interest that may arise.
A conflict of interest is a situation in which someone in a position of trust to the client has competing professional or personal interests. Such competing interests can make it difficult for individuals to fulfil their duties to their clients impartially. A conflict of interest may exist even if no unethical or improper act results from it.
Conflicts of interest arise when in the course of providing a service to a client, the Firm, its appointed representatives or its employees:
The Firm has reviewed its business model and has identified the following potential conflicts of interest:
The Firm will regularly review its business model to ensure any new potential conflicts of interest are noted and managed or prevented effectively.
The Firm is a member of a group and, as such, will take into consideration circumstances where conflicts of interest may arise as a result of the structure and business activities of the group.
The Firm maintains a clear segregation of roles and responsibilities within the Management Body to maintain an effective control environment and to avoid conflicts of interest in roles wherever possible.
Staff will be based in Pennsylvania, US. The Firm also operates an operational branch in London. All information (both sensitive and non-sensitive information) is held in the cloud and the Firm’s technology system, both of which are securely protected and accessible only by relevant members of staff. Staff based in Pennsylvania are supervised in the US whereas staff based in London are supervised by the relevant persons there. Employees will receive training on understanding their obligations in this area.
Employees involved in carrying out activities or providing services to clients will have a different management reporting line to employees carrying out activities or providing services to other clients who have different, potentially conflicting interests or activities for the Firm itself.
The remuneration of staff will be assessed annually in accordance with the Firm's appraisal process and Remuneration Policy. The Firm strives to ensure our employees remain motivated whilst at the same time ensuring that the remuneration scheme does not encourage inappropriate behaviour. In order to prevent a conflict of interest, the remuneration structure takes into account a number of different factors including a good standard of compliance. The Firm's Remuneration Policy is in place and will be adhered to.
The Firm recognises that current and future employees may have an interest, relationship or arrangement whereby they act as a trustee, hold power of attorney, hold a Directorship or another arrangement that may potentially create a conflict of interest. The Firm requires its employees to declare any such interests and will take the appropriate steps to manage or prevent any conflicts of interest that are identified. To manage such conflicts, the Firm requires its employees to disclose Directorships and interests in other companies and to disregard the interest, relationship or arrangement concerned when acting on behalf of clients. If the conflict is significant, the Firm may require that the employee not participate in the particular activity with which they are conflicted.
The Firm is aware of its duty to avoid a conflict of interest arising where an employee has an indirect interest through a connected person (e.g. adult child or spouse). Relevant employees are required to disclose any potential conflicts of interest through connected persons. To manage such conflicts, the Firm requires its employees to disclose the interests and to disregard the interest when acting on behalf of clients.
The Firm has a strict policy, which specifically prohibits employees from soliciting or accepting any inducements to conduct business in a specific manner that would give rise to a detriment to a client or to favour the interests of one client over another.
The Firm recognises that Gifts and Hospitality can lead to potential conflicts of interest. Employees are not permitted to accept, or give to, any person any gift or other benefit that cannot properly be regarded as justifiable in all circumstances or may give rise to the perception that in doing so, decisions may be influenced or may not be impartial. All employees are expected to act with the highest standards of integrity to avoid any allegations of conflicts of interests.
The Firm requires any employee who is offered any kind of gift or payment over an agreed limit from either inside or outside the Firm to report this to the Firm's Nominated Officer for recording on the Gifts & Hospitality Register. In addition, any indications of expectation of support following a gift or hospitality of any value should be reported to the Nominated Officer.
The Nominated Officer will regularly review the Gifts & Hospitality Register to identify any conflicts of interest that may be occurring.
The Firm's Gifts and Hospitality Policy contains further information and the agreed value limits set by the Management Body.
The Firm recognises that employees dealing on their own personal account may present conflicts of interests.
The firm offers brokerage services in the most liquid assets in financial markets. This means that discretionary trading decisions by individual employees are highly unlikely to have an impact on the markets in those instruments. The risk of market manipulation is therefore minimal.
In order to manage actual or potential conflicts that may arise from personal account dealing, the Firm has a Personal Account Dealing Policy in place. Firm employees may carry out personal transactions without pre-approval once the Compliance Oversight Function has approved the details of their live accounts and added them to the Personal Account Dealing Register. Employees are mandated that all PA trades in instruments that are offered for Trader creation happen in such a way that the Firm may access their trade records.
The Firm's Order Execution Policy requires employees to take all reasonable steps to achieve the best overall trading result for clients; to exercise consistent standards; and operate the same processes across all markets, clients and financial instruments in which it operates.
Conflicts of interest that the Firm cannot manage or prevent will be logged on the Conflicts of Interest Register and the Firm will either inform the client or decline to act for the client. The Conflicts of Interest Register will be provided to the Management Body for review at least annually.
As a last resort, where there is no other means of managing the conflict or where the measures in place do not, in the view of the Firm, sufficiently protect the interests of clients, the conflict of interest will be disclosed to clients, to enable an informed decision to be made by the client as to whether they wish to continue doing business with the Firm in that particular situation.
The disclosure will be in writing and will include:
A statement that the arrangement(s) in place by the Firm are not sufficient to ensure that the risk of damage to the interests of the client will be prevented
A description of the specific conflict of interest
An explanation of the risks to the client that arise as a result of the conflict of interest
Sufficient detail to enable the client to make an informed decision as to whether to proceed or not.
Where the Firm considers that it is not able to manage the conflict of interest in any other way, it may decline to act for a client.
Any breaches of the Conflicts of Interest rules will be recorded on the Firm's breach log and escalated to the Board.
This Policy was last reviewed and approved by the Company Board on 3 December 2020.