Conflict of Interest Policy
MaxFX – trade name of TopFX LTD (hereinafter called the “Company”), whose headquarters are at 33, Promahon Eleftherias Street, Deana Beach Offices, Office 212, Block 1, Ayios Athanasios, Limassol 4103, CYPRUS, is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 138/11.
This document sets out the Company’s policy to effectively manage any conflicts of interest that may arise in carrying on its business. This conflict of interest policy (the “Policy”) is established in accordance with the Markets in Financial Instruments Directive (MiFid) and the Cyprus Securities and Exchanges Commission (CySEC) Laws and Directives aiming to enable the Company to take all reasonable steps to identify conflicts of interest between itself, including its managers and employees, tied agents, or other relevant persons, as well as any person directly or indirectly linked to them by control, and their clients or between one client and another, that arise in the course of providing any investment and ancillary services, or combinations thereof.
The Company maintains and operates effective organisational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest from adversely affecting the interests of its Clients.
Senior management is responsible for ensuring that the Company’s systems, controls and procedures are adequate to identify and manage conflict of interest. It also responsible to ensure that all the arrangements made under this policy operate effectively.
The conflict of interest policy aims to ensure that the Company’s clients are treated fairly and at the highest level of integrity and that their interests are protected at all times. It also aims to identify conflicts of interest between:
a) The company and a Client;
b) A relevant person and a Client;
c) A company of the Group and a Client;
d) Two or more Clients of the Company in the course of providing services to these Clients; and to prevent conflicts of interest from adversely affecting the interest of its Client.
The Policy applies to all Clients and also to “relevant persons” and refers to all transactions/services with all clients. Relevant persons in relation to the Company means:
a) a member of the board of directors, partner or equivalent, manager or tied agent of the Company
b) a member of the board of directors, partner or equivalent, or manager of any tied agent of the Company
c) an employee of the Company or of a tied agent of the Company, as well as any other natural person whose services are placed
at the disposal and under the control of the Company or a tied agent of the Company who is involved in the provision by the Company of investment services or/and the performance of investment activities
d) a natural person who is directly involved in the provision of services to the Company or to its tied agent under an outsourcing arrangement for the purpose of the provision by the Company of investment services or/and the performance of investment activities
4. Conflicts of Interest Policy
The Company’s Conflicts of Interest Policy sets out how:
a) The Company will identify circumstances which may give rise to conflicts of interest entailing a material risk of damage to its Clients’ interests.
b) The Company has established appropriate mechanisms and systems to manage those conflicts, and
c) The Company maintains systems designed to prevent damage to its Clients’ interests through identified conflicts.
5. Identification of Conflicts of Interest
The Company takes adequate steps to properly identify Conflicts of Interest. For the purposes of identifying the types of conflict of interest that arise in the course of providing investment and ancillary services or a combination thereof and whose existence may damage the interests of a client, the Company takes into account the question of whether the Company or a relevant person, or a person directly or indirectly linked by control to the Company, is in any of the following situations, whether as a result of providing investment or ancillary services or investment activities or otherwise:
a) Is likely to make a financial gain, or avoid a financial loss, at the expense of the Client;
b) Has an interest in the outcome of a service provided to the Client or of a transaction carried out on behalf of the Client, which is distinct from the Clients interest in that outcome;
c) Has a financial or other incentive to favour the interest of one Client over another;
d) Carries on the same business as the Client;
e) Receives from a person other than a Client an inducement in relation to a service provided to a Client, in the form of monies, goods or services, other than the standard commission or fee for that service;
6. Potential Sources of Conflicts of Interest
Taking into consideration the services the Company offers, potential Conflict of Interest circumstances may include, but are not limited to:
Taking into consideration the services the Company offers, potential Conflict of Interest circumstances may include, but are not limited to the following:
a) The Company or a company of the Company’s group may engage in business and trading activities for its own account and/or Client accounts whilst other Clients are active in relevant markets at the same time;
b) A transaction is effected in financial instruments in respect of which the Company or a company of the Company’s group, or its director or employee is contemporaneously trading or has traded on its own account or has either a long or short position;
c) The Company or Relevant Person receives substantial gifts or entertainment (including non-monetary inducements) that may influence behaviour in a way that conflicts with the interest of the Client of the Company;
d) A transaction is effected in financial instruments in respect of which the Company may benefit from a commission, fee, mark-up or mark-down payable otherwise than by a client, and/or Company may also be remunerated by the counterparty to any such transaction;
e) A director or employee of the Company is a director of a fund and or any company which is a client of the Company;
f) A transaction is effected in financial instruments issued by an affiliated company or the client or customer of an affiliated company
g) The Company may act as agent for a client in relation to transactions in which it is also acting as agent for the account of other customers and/or Group companies;
h) The Company acting as agent for the Client, matches an order of the Client with an order of another customer for whom it is acting as agent;
i) A transaction is effected in securities issued by an affiliated Company or the client or customer of an affiliated Company;
j) The Company deals on behalf of the client with, or in the securities of, an affiliated Company;
k) A transaction is effected in units or shares of connected investment trusts or unit trusts or open ended investment companies or
of any Company of which the Company or an affiliated Company is the manager, authorised corporate director, operator, banker, adviser, custodian, administrator, trustee or depositary;
l) Introducing agents may have other interests than the Company and/or their clients;
m) White Label Partners may have other interests than the Company and/or their clients;
n) Representatives/Introducing agents of the Company may be aware of large client orders to acquire or dispose of a large quantity of a particular financial instrument and either the Company or its representatives/Introducing agents purchase (or sell) the financial instrument beforehand.
7. Identifying and Managing Conflicts of Interest
The Company maintains and operates effective organizational and administrative procedures to identify and manage conflicts of interest. Should a Conflict of Interest arise, it is managed promptly and fairly. The Company has in place arrangements to ensure that:
who have a valid business reason for receiving such information;
8. Information Barriers
The Company respects the confidentiality of information it receives about its Clients and operates a “Need to Know” approach and complies with all applicable laws in respect of the handling of that information. Access to confidential information is restricted to those who have a proper requirement for the information consistent with the legitimate interest of a Client of the Company.
The Company has established and operates internal organisational arrangements to avoid conflicts of interest by controlling, managing or restricting as deemed appropriate the flow of confidential information between different areas of business or within a specific
division or department. In particular, Chinese Walls are a key tool for conflict of interest prevention avoiding insider dealing and market manipulation risks. Chinese Walls can involve separation of premises, personnel, reporting lines, files and IT-systems and controlled procedures for the movement of personnel and information between the Company and any other part of the Company Group. The Company maintains permanent information barriers between different departments.
9. Policies and Procedures
The Company has developed and implemented policies and procedures throughout its business to prevent or manage potential conflicts of interests. Its employees receive guidance and training in these policies and procedures, and they are subject to monitoring and review processes.
10. Separate Supervision/Functions
There is a clear distinction between the different departments’ operations. Two departments or businesses will be managed by different senior staff members, if running them under supervision of one person, may create conflicts of interest. In this way it is secured that no single person will gather conflicting information, thus counterfeiting or hiding information from investors is minimized. Furthermore the four-eyes principle in supervising the Company’s activities will be established.
Pay and bonuses are linked to the profits of the Company or the business or department where an employee works. Pay and bonuses linked to the performance of another department, with possible conflicting interests, is avoided at all times.
The Company does not offer, solicit or accept any inducements, other than the following:
(a) A fee, commission or non-monetary benefit provided to or by a client or a person on behalf of a client;
(b) A fee, commission or non-monetary benefit provided to or by a third party or a person acting on behalf of a third party, under the following conditions:
i. the fee, commission or benefit is disclosed to a client, prior to the provision of the relevant service; and
ii. it is designed to enhance the quality of the relevant service to a client and in line with Company’s duty to act in the best interests of a client;
(c) Proper fees for the provision of investment services, such as custody costs, settlement and exchange fees, regulatory levies or legal fees, and which cannot give rise to conflicts with Company’s duties to act honestly, fairly and professionally in accordance with the best interests of its clients
13. Personal Account Dealing
For the purpose of this Conflict of Interest Policy, “Personal Transaction” means a trade in financial instrument effected by or on behalf of a relevant person, where at least one of the following criteria are met:
(a) The relevant person is acting outside the scope of the activities he carries out in that capacity,
(b) The trade is carried out for the account of any of the following persons:
i. the relevant person,
ii. any person with whom he has a family relationship, or with whom he has close links,
iii. a person whose relationship with the relevant person is such that the relevant person has a direct or indirect material interest in the outcome of the trade, other than a fee or commission for the execution of the trade
To prevent conflicts arising from the use of information obtained from clients, and market abuse in general, all employees are subject to personal account dealing rules. Employees are prohibited to keep investor accounts in other Investing Firms without Company’s prior authorization and are obliged to bring this to Company’s attention. They are also obliged to authorize the Company to request transaction reports from other Investment Firms. Furthermore the Company requires all employees to have Personal Account trades
approved before dealing to ensure that dealing does not occur in securities in circumstances where such dealings should be restricted.
Relevant persons are informed on the restrictions on personal transactions and the measures established by the Company in connection with personal transactions and Notification procedures.
Furthermore the Company has established, implemented and maintains adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information within the meaning of section 5 of the Market Manipulation (Market Abuse) Law or to other confidential information relating to clients or transactions with or for clients by virtue of an activity carried out by him on behalf of the Company:
a) Entering into a personal transaction which meets at least one of the following criteria:
i. That person is prohibited from entering into it under the Market Abuse Law;
ii. It involves the misuse or improper disclosure of that confidential information;
iii. It conflicts or is likely to conflict with an obligation of the Company under the Law.
b) Advising or procuring, other than in the proper course of his employment or contract for services, any other person to enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by point (a) above or investment research reports or the misuse of information relating to pending client orders.
c) Disclosing, other than in the normal course of his employment or contract for services, any information or opinion to any other person if the relevant person knows, or reasonably ought to know, that as a result of that disclosure that other person will or would be likely to take either of the following steps:
i. To enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by point (a) above or investment research reports or the misuse of information relating to pending client orders;
ii. To advise or procure another person to enter into such a transaction. The above arrangements have been designed to ensure that:
a) Each relevant person is aware of the restrictions on personal transactions, and of the measures established by the Company in connection with personal transactions and disclosure.
b) The Company is informed promptly of any personal transaction entered into by a relevant person, either by notification of that transaction or by other internal procedures enabling the Company to identify such transactions. In the case of outsourcing arrangements the Company always ensures that the firm to which the activity is outsourced maintains a record of personal transactions entered into by any relevant person and provides that information to the Company promptly on request.
c) A record is kept of the personal transaction notified to the Company or identified by it, including any authorisation or prohibition in connection with such a transaction.
14. Employees’ Activities outside the Company
Company’s employees are subject to rules designed to avoid conflicts of interest with activities they undertake outside the Company.
Company’s employees will not accept any gifts other than those considered normal in their line of business. Excessive gifts from Clients may result in a conflict of interest, something the Company is committed to avoiding.
Where the Company’s organisational or administrative arrangements are not sufficient to ensure, with reasonable confidence, that risks of damage to client interests will be prevented, the Company will either decline to act or, where confidentiality considerations permit,
will disclose the general nature and/or sources of conflicts of interest to the client or potential client before undertaking business on its behalf, in order to enable that client to take an informed decision with respect to the investment or ancillary service in the context of which the conflict of interest arises.
17. Declining to Act
The Company may decline to act for a client in cases where it believes the conflict of interest cannot be managed in any other way.
18. Amendment / review
The Company reserves the right to review and/or amend its conflict of interest policy and arrangements whenever it deems appropriate. The Company shall review and amend, if needed, this policy at least on an annual basis. The Company maintains an updated copy of its conflicts of interest policy posted on its Website.
19. Further Information
Further information on the Company’s Conflict of Interest Policy is available upon request from the Company’s offices at: Tel.: + 357 25344282, Fax: + 357 25352266 or e-mail: complianceATmaxfx.com