Conflicts of Interest Policy
Oberon Investments Ltd is authorised and regulated by the Financial Conduct Authority (“FCA”) and this document has been compiled to comply with the FCA rules and requirements. This document is the property of Oberon Investments Ltd and its contents are strictly confidential and should not be disseminated outside of the Firm. Any personal copies of this document must be returned to Oberon Investments Ltd upon termination of employment.
This Policy on Conflicts of Interest is important and must be read, understood and followed by Oberon Investments Ltd’s staff (directors, employees, contractors, including temporary workers and consultants) at all times. The Policy is intended to set out the minimum standards of propriety that Oberon Investments Ltd (‘Oberon or ‘the Firm’) expects from its staff. Every director and employee/contractor of the Firm is required, as a condition of their continued employment/contractual obligations to read, understand and comply with this Policy of Independence. Violations may lead to disciplinary sanctions including possible termination of employment.
Each of Oberon ’s directors and employees/contractors represent the Firm and, as such, is obligated to act for and in the best interests of the Firm and its clients. Certain personal activities or interests of a director or employee/contractor may have some connection with Oberon ’s activities or interests but involve little or no conflicts of interest (for example charitable or civic activities). Certain interests or activities of staff may involve a significant actual or potential conflict with the interests or activities of the Firm and/or its clients or may give the appearance of conflict though no actual or potential conflict exists. Each staff member must be alert to such conflicts of interest. He/she should scrupulously examine and avoid any activity or situation in which personal behaviour directly or indirectly conflict with the interests of the Firm or its clients. Such behaviour typically, but not exclusively, arises when it involves the use of knowledge acquired in conducting Oberon ’s business or from relationships with Oberon ’s clients or others.
One of the principal areas of potential conflict of interests is in the use of confidential information. Clients conduct business with the Firm with the expectation that all information and data provided by them or related to their business they conduct with Oberon will be maintained in absolute confidence. For this reason, all information concerning the business of the Firm’s clients and their transactions must be treated as absolutely confidential and must be confined, even within Oberon, only to those who must have such information in order for the Firm to carry out its business properly and effectively. The fact that rumours may be circulating, even if they are accurate, does not mean that the Firm’s confidential information has become public information and does not relieve Oberon or its staff of the ongoing obligation to treat the information as confidential.
No director or employee/contractor is permitted to benefit or allow another person to benefit (directly or indirectly, financially or otherwise) from knowledge of confidential information whether related to financial decisions, investment evaluation systems, strategies or methods, investment decisions, investment positions, in-house research or otherwise. This prohibition extends to the directors’ and employees’/contractors’ relatives, friends and business contacts as well as Connected Persons as defined in the rules of the FCA and any Appointed Representatives or Tied Agents of Oberon . Oberon does not have Appointed Representatives and Tied Agents. Oberon ’s directors and employees/contractors must ensure that they take particular care not to discuss confidential information with, or in the presence of, unauthorised persons, whether from within or outside the Firm.
Each of the Firm’s directors and employees/contractors shall hold in a fiduciary capacity for the benefit of Oberon all information, knowledge and data relating to or concerned with its operations, business and affairs. He or she shall not, at any time, use, disclose or divulge any such information, knowledge or data to any person or corporate body other than Oberon and authorised persons within the Firm, except as may be legitimately required in connection with the business and affairs of the Firm.
CONFLICTS OF INTEREST
THE GUIDING PRINCIPLES
• This document consolidates Oberon ’s procedures and controls for identifying, managing, recording and (where necessary) disclosing interest. The objective is to provide all personnel with clear guidelines for compliance with Oberon ’s internal regulations and those of the Financial Conduct Authority (‘FCA’).
• The definition of a Conflict of Interest is any action that is likely to disadvantage a client’s interest against that of Oberon or to disadvantage one client’s interest against that of another client.
• The FCA rules require that firms, in the first instance, have in place arrangements to manage conflicts. Where such arrangements are not sufficient to ensure with reasonable confidence that the risk of damage to clients’ interests will be prevented, a firm is required to disclose a conflict to its client before undertaking business with that client.
• The FCA Principles that are particularly relevant to Conflicts of Interest are:
o Principle 1 – A firm must conduct its business with integrity.
o Principle 6 – A firm must pay due regard to the interests of its customers and treat them fairly;
o Principle 8 – A firm must manage conflicts of interest, both between itself and its customers, and between a customer and another client.
• The FCA Handbook implements the conflicts of interest requirements and the relevant rules are located in the Senior Management Arrangements, Systems and Controls (“SYSC”) found in the High-Level Standards module of the FCA Handbook. All capitalised terms refer to the FCA definitions.
• Firms are required to take all appropriate steps to identify, manage, record, prevent and, where necessary disclose conflicts of interests between the Firm, including its managers, employees/contractors, appointed representatives or any person directly or indirectly linked to them by control, and its clients as well as between one client and another, and have in place a written policy in respect of conflicts of interest.
• The Rules apply to all client types (i.e. Retail Client, Professional Client and Eligible Counter party) where the Firm provides a service and where such conflicts could have a detrimental effect on clients.
• Where a firm is a member of a group, it must also consider where conflicts of interest may arise as a consequence of the group structure or business activities of other group companies.
Connected and Relevant Person
A ‘connected person’ is:
• an employee’s, contractor’s or director’s spouse or partner, children and other dependents, or any business, personal or domestic relationship where he/she has influence over the individual’s judgement as to how to invest;
• any company or unincorporated body controlled by the employee/contractor/director or in which they have a significant interest;
• employee/contractor/director or a related person or company has an interest; Page 5 of 17
• an estate or trust where employee/contractor/director is dealing as a personal representative of the estate or as the trustee of the trust in which the employee/contractor/director or a related person or company has an interest;
• employee/contractor/director dealing for the account of another person unless they do so in the course of their employment with Oberon. This includes dealing for the account of: • any other relative who shares the same household;
• any person with whom the employee/contractor/director has close links; and
• any person whose relationship with the employee/contractor/director is such the employee/contractor/director has a direct or indirect material interest in the outcome of the trade other than any fee or commission for the execution of the trade.
A ‘relevant person’ is:
• a director, partner or equivalent, manager or appointed representative (or where applicable, tied agent) of the Firm;
• a director, partner or equivalent, or manager of any appointed representative (or where applicable, tied agent) of the Firm;
• an employee of the Firm or of an appointed representative (or where applicable, tied agent) of the firm; as well as any other natural person whose services are placed at the disposal and under the control of the Firm or an appointed representative or a tied agent of the Firm and who is involved in the provision by the Firm of regulated activities;
• a natural person who is directly involved in the provision of services to the Firm or its appointed representative (or where applicable, tied agent) under an outsourcing arrangement or (in the case of a management company) a delegation arrangement to third parties, for the purpose of the provision by the firm of regulated activities or (in the case of a management company) collective portfolio management.
OBLIGATIONS IN RESPECT OF MANAGEMENT OF CONFLICTS OF INTEREST
• Oberon is required to take all appropriate steps to identify conflicts of interest between: o itself, including its managers, employees, contractors, directors and appointed representatives or tied agents or any person directly or indirectly linked to them by control, and a client of the firm, or
• one client of the firm and another client that arise in the course of the Firm providing services to its clients in the course of carrying on regulated activities or ancillary activities or providing ancillary services. Oberon has a policy of applying the same standards for identification, prevention or managing, of conflicts across all of its business lines, Page 6 of 17 irrespective of whether or not the particular business line is a regulated activity. In order to fulfil its obligation to ‘take all appropriate steps’ the Firm will consider:
o the level of risk that such a conflict may constitute or give rise to a material risk of damage to a client/clients’ interests;
o the nature, scale and complexity of its business; and
o nature and range of products and services offered in the course of its business.
• Oberon will maintain and operate effective organisational and administrative arrangements so as to ensure it takes all appropriate steps to prevent conflicts of interest from adversely affecting the interests of its clients.
SENIOR MANAGEMENT RESPONSIBILITIES
• The responsibility for the management of Conflicts of Interest rests with Oberon ’s Senior Management. Oberon Senior Management shall therefore ensure that they are kept fully aware of the FCA requirements in respect of Conflicts of Interest and are able to identify and prevent or manage any Conflicts of Interest or potential Conflicts of Interest. They must be able to assess objectively any conflicts or potential conflicts and be aware of the steps that need to be taken to mitigate any such conflicts in respect of both their business and personal responsibilities.
• Oberon Senior Management is responsible for ensuring that Oberon ’s systems and controls are robust and sufficient to determine that Oberon is taking all appropriate steps to identify and prevent or manage any conflicts of interest that may arise. Oberon Senior Management will ensure that they receive sufficient Management Information to enable them to carry out an informed assessment of the Firm’s arrangements in order to assess that they are operating effectively. In practice, this requires Oberon ’s Senior Management to:
o be involved in the identification and management of areas where conflicts of interest may arise.
o regularly review Oberon ’s risks of conflicts of interest arising and the mitigating arrangements in place. This will involve an inclusive review of the entire business activities of the Firm and, where appropriate, will include the relevant activities of any group companies.
o put in place a Conflicts of Interest Policy and a register of any conflicts as required under the rules of the FCA. o review the Conflicts of Interest Policy and the register of conflicts on a regular basis and, at a minimum, on an annual basis.
o on an annual basis, all Directors and staff must formally confirm conflicts of interest by completing a Conflicts of Interest attestation.
o assess and review on an ongoing basis situations that could potentially give rise to Conflicts of Interest. For example, whether the firm’s organisational structure is likely to incentivise behaviour that may lead to conflicts (remuneration, bonuses, appraisal, management/control arrangements that reward or potentially reward behaviour that disadvantages the interests of one client in favour of the Firm or another client).
o put in place processes so that the Senior Management is able to identify any new conflicts of interest that may arise, for example as a result of new business or new product initiatives.
• The provision of relevant, timely and accurate management information in order to assist senior management in controlling conflict of interest issues follows a well-defined process which has been established for all compliance matters in the Firm.
• Management information is derived in the first instance from the Firm’s compliance department’s monitoring processes. The Compliance Department conducts a series of tests, weighted as to frequency based on the perceived compliance risk. The results of the compliance monitoring programme are documented as part of Oberon’s Risk Assessment process, which is regularly reviewed by Senior Management.
• In addition, the heads of each department of the Firm are required to respond to the findings of the compliance monitoring programme.
• Remedial action is undertaken by the relevant Department to ensure that systemic or repeated failures in established procedures are addressed. Senior Management is responsible for ensuring that the heads of each department or section as appropriate are aware of their duty to manage and control conflicts of interest and to ensure that departmental procedures are followed.
• When reviewing new business, product initiatives or proposals, Oberon Senior Management must ensure that any evaluation includes consideration and identification of any areas of conflicts with the Firm’s existing business activity. Where conflicts of interest are identified, before proceeding with the new business or product, Oberon Senior Management will ensure that mitigating arrangements have been put in place to manage such conflicts. If the Firm is not able to put in place adequate mitigating arrangements, the Firm will either decide not to proceed with the new business or product or alternatively make the necessary disclosures to its clients in accordance with the Disclosure section below.
CRITERIA FOR THE IDENTIFICATION OF ACTUAL OR POTENTIAL AREAS OF CONFLICT
• As required by SYSC 10.1.4R, in our process for the identification of conflicts, Oberon considers whether the Firm or a Relevant Person or a person directly or indirectly linked by control to the firm:
o is likely to make a financial gain, or avoid a financial loss, at the expense of the client;
o 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 Client’s interest in that outcome;
o has a financial or other incentive to favour the interest of one Client or group of Clients over the interests of another Client;
o carries on the same business as the Client; or
o receives or will receive from a Person other than the Client an inducement in relation to a service provided to the Client, in the form of monies, goods or services, other than the standard commission or fee for that service.
• Oberon has a policy of identifying and managing or preventing a conflict of interest. If, having identified a conflict of interest, Oberon ’s senior management concludes that Oberon cannot prevent risks of damage to the interest of a client, Oberon will only proceed following the resolution of Oberon ’s senior management to do so. Such a decision to proceed will be very much the exception and will only be made once a proper consideration of the matter has been undertaken by Oberon ’s senior management.
• Should Oberon ’s senior management resolve to proceed, it will ensure that Oberon complies with its disclosure obligations.
• Oberon will ensure that the disclosure that it makes to the client(s) affected will be in a durable medium and complies with the following standards and that the following will be clearly disclosed:
o the general nature and sources of the conflict of interest o the steps taken by Oberon to mitigate the risks of damage to the interests of the client
o the fact that the organisational and administrative arrangements established by Oberon to prevent or manage that conflict are not sufficient to ensure, with reasonable confidence, that the risk of damage to the interests of the client will be prevented
o a specific description of the conflicts of interest o an explanation of the risks to the client that arise as a result of the conflicts of interest
o the disclosure will include sufficient detail to enable the client to take an informed decision with respect to the service to be provided by Oberon in which the conflict of interest arises
• Oberon understands and accepts that:
o disclosing a conflict of interest is not a form of managing that conflict of interest
o disclosure should only be used as a measure of last resort. Over-reliance on disclosure without adequate consideration as to how conflicts may appropriately be managed is not permitted.
o even where it has made a disclosure, Oberon will continue to maintain and operate effective organisational and administrative arrangements to take all appropriate steps to prevent conflicts of interest from adversely affecting the interests of clients.
• Oberon maintains a record of any circumstances in which a conflict of interest may arise or has arisen as a result of its activities of which this Policy forms the basis. Any conflicts that may arise during the course of business must be logged for review by the Compliance team. These records will be maintained and updated on a regular basis and will be retained for a minimum period of 5 years.
MANAGEMENT OF CONFLICTS OF INTEREST
• The Senior Management of Oberon has undertaken a review to identify the circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more clients in respect of the specific services and activities carried out by or on behalf of Oberon .
• In order to protect the interests of its clients, Oberon has put in place the procedures and policies that are to be followed and the measures to be taken by the Firm, its staff agents, etc. to manage such conflicts. The details of these policies and procedures are set out in this document.
• The policies and procedures have been designed so that Relevant Persons conduct their activities at a level of independence appropriate to the size and activities of the Firm and if applicable to the Group and to ensure that the Firm has taken all appropriate steps to protect the interests of its Clients.
• If any of the Firm’s procedures do not provide the necessary level of independence, the Firm will put in place alternative or additional measures and procedures as are necessary and appropriate.
• Oberon will decline to act in a matter where it considers that it cannot prevent a material risk of damage to the interests of one or more clients.
• The separate supervision of persons whose principal functions involve carrying out activities on behalf of, or providing services to, clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of Oberon.
• Oberon will ensure that its compensation arrangements will not give rise to conflicts of interest between the firm, its staff and its clients. Oberon will implement measures to prevent or limit Oberon ’s staff from exercising inappropriate influence over the way in which Oberon carries out investment or ancillary services or activities.
• Oberon will implement measures to prevent or control the simultaneous or sequential involvement of Oberon ’s staff in separate investment or ancillary services or activities where such involvement may impair the proper management of conflicts of interest.
• The Oberon will ensure that all staff receive training in respect of the Oberon ’s procedures for identifying, managing and escalating conflicts. All Oberon’s directors and employees/contractors are made fully aware of the Firm’s Conflicts of Interest Policy and of their responsibilities to ensure that customers are treated fairly.
• Oberon will review this Conflicts of Interest Policy frequently, and at least annually.
AREAS OF POTENTIAL CONFLICTS OF INTEREST
• Oberon has identified the following circumstances in which conflicts of interest may arise. Details of the arrangements Oberon has put in place to prevent conflicts of interest arising are set out below or in the relevant Appendix.
• Oberon has established the following procedures to prevent the possibility of any conflict of interest arising in the circumstances listed above. Each control procedure is cross referenced to the potential conflict circumstance and expanded upon in the relevant Appendix where necessary.
• The Firm has put in place measures to prevent or limit any staff member from exercising inappropriate influence over the way in which a Relevant Person carries out services or activities. These measures are detailed, for example, in our, Inducements Policy and Gifts and Entertainment Policy.
• The Firm’s Order Execution Policy addresses the arrangements, where Oberon acting as agent for the client, matches an order of the client with that of another client for which the Firm is acting as agent.
• The Firm has implemented a Gifts and Entertainment Policy (which includes non-monetary benefits) so as to verify that no benefits are received that may influence the behaviour of its personnel.
• The Firm’s arrangements to manage conflicts that may arise through service on Company Boards and other Outside Activities of its employees/contractors and directors are detailed in AppendixC.
• Conflicts of interest may arise in connection with Personal Transactions by Firm’s employees, agents and relevant persons. These issues are addressed in the Firm’s Personal Account Dealing Policy.
MONITORING POTENTIAL CONFLICT OF INTEREST SITUATIONS
• Oberon follows the following procedures for monitoring compliance with the FCA’s rules and guidance on conflicts of interest.
• Oberon documents its policies in this regard, both in general terms in the Compliance Manual and this Policy and its appendices which contain the Firm’s supplementary policies. These documents are circulated to all the Firm’s staff.
• The Compliance Department through its Compliance Monitoring Programme conducts various tests which, inter alia, contain elements of conflicts monitoring. These will include:
o Review of fees, commission and non-monetary benefits received or paid by the Firm including review of Gifts & Entertainment records.
• The Compliance Department maintains the MyComplianceOffice (MCO) platform, where all staff members must report any Conflicts of Interest. The Register of Conflicts of Interest records any instances of where a Conflict of Interest has occurred and the remedial action taken.
• Details of the findings from the Compliance Monitoring Programme are provided on a regular basis to the Firm’s Senior Management.
Oberon has a policy of not paying or accepting from any party (other than the client or a person on behalf of the client) any fee or commission in connection with the provision of an investment service or ancillary service. Oberon has a policy of not providing to, or receiving from, any party (other than the client or a person on behalf of the client) any non-monetary benefit in connection with the provision of an investment service or ancillary service, unless it is an acceptable minor non-monetary benefit which complies with the standards below. An acceptable minor non-monetary benefit is one which is:
• disclosed (including in a generic way) prior to the provision of the relevant service to the client
• capable of enhancing the quality of service provided to the client
• of a scale and nature that it could not be judged to impair the Oberon ’s compliance with its duty to act honestly, fairly and professionally in the best interests of the client
• reasonable, proportionate and of a scale that is unlikely to influence the Oberon’s behaviour in any way that is detrimental to the interests of the relevant client and which consists of:
• information or documentation relating to a financial instrument or an investment service, that is generic in nature or personalised to reflect the circumstances of an individual client or
• written material from a third party that is commissioned and paid for by a corporate issuer or potential issuer to promote a new issuance by the company, or where the third-party firm is contractually engaged and paid by the issuer to produce such material on an ongoing basis, provided that the relationship is clearly disclosed in the material and that the material is made available at the same time to any firms wishing to receive it, or to the general public
• participation in conferences, seminars and other training events on the benefits and features of a specific financial instrument or an investment service
• hospitality of a reasonable de minimis value, such as food and drink during a business meeting or a conference, seminar or other training events mentioned above Oberon regards a non-monetary benefit is designed to enhance the quality of the relevant service to a client only if:
• it is justified by the provision of an additional or higher-level service to the client and is proportional to the level of inducements received
• it does not directly benefit Oberon, its shareholders or employees without tangible benefit to the client
• it is justified by the provision of an ongoing benefit to the client in relation to an ongoing inducement and
• the provision of the service by Oberon to the client is not biased or distorted as a result of the fee, commission or non-monetary benefit
A non-monetary benefit that involves a third party allocating valuable resources to Oberon is not a minor non-monetary benefit and accordingly is considered to impair compliance with Oberon ’s duty to act in the client’s best interest. Oberon will not provide or receive such a benefit. Non-substantive material or services consisting of short term market commentary on the latest economic statistics or company results or information on upcoming releases or events which are provided by a third party and which:
• contain only a brief unsubstantiated summary of the third party’s own opinion on the information; and
• do not include any substantive analysis (e.g. where the third party simply reiterates a view based on an existing recommendation or substantive research),
can be deemed to be information relating to a financial instrument or investment service of a scale and nature such that it constitutes an acceptable minor non-monetary benefit.
Oberon regularly reviews and monitors all fees and non-monetary benefits that are paid, received or provided to or by third parties to ensure that they comply with Oberon ’s policy and meet the FCA requirements and, in particular, that where necessary customers are provided essential terms of such arrangements in sufficient detail to enable the customer to tie in the disclosure to the services provided to the client and to take a decision as to whether to request further/full information regarding the matter. The information provided will detail the existence, nature and amount of the fee or benefit or, where the amount cannot be ascertained, the method of calculating that amount.
SERVICE ON BOARDS OF DIRECTORS AND OUTSIDE ACTIVITIES
Service on boards of directors of outside companies, as well as other outside activities generally, could lead to potential conflicts of interest and insider trading problems, and may otherwise interfere with your duties to the Firm. Accordingly, Oberon ’s personnel may not serve as a director of an outside company (or in a similar role for an unincorporated entity) without prior approval from Oberon ’s Compliance team. If you desire to serve as a director of an outside company, you must notify Compliance before accepting the position. In addition, if service as an outside director is approved and unless otherwise agreed by Senior Management in a particular case,you must pay, assign or transfer to Oberon all compensation and other financial benefits related to or arising out of such service in recognition of the reduction of your business and professional time that would otherwise be devoted to Oberon. Any employee serving as a director of a public company (or a private company that is about to go public) may be required to resign or comply with other controls as may be appropriate.
All new hires must:
• promptly disclose any pre-existing board memberships to Compliance,
• obtain approval from Oberon ’s Compliance team if they wish to continue such membership, and
• comply with any conditions placed on them to control or eliminate potential conflicts of interest. The foregoing restrictions do not apply to service on the board of a charitable organization or the board of another group company. With respect to other outside activities:
• You may not be employed by, or accept any form of compensation or unpaid work from, any other person as a result of any business activity (including volunteering or pro bono work, consulting engagements, paid positions with governmental or charitable organizations and part-time, at-home ventures such as multi- level marketing programs or freelance software development) outside the scope of your relationship with Oberon , without the prior written approval of Compliance team .
• You may not raise money or participate in the raising of money for any company, individual or other business venture, except with respect to charitable or educational organizations, without the prior written approval of Compliance.
• You may not form or participate in any stockholders’ or creditors’ committee, except as part of your responsibilities to the Firm, without the prior written approval of Compliance . A copy of any such written approval should be forwarded to Compliance.
Oberon has in place a Remuneration Policy which sets out the Firm’s arrangements to ensure that its compensation arrangements will not give rise to conflicts of interest between the firm, its employees and its clients.
CONFLICTS RELATING TO THE OBERON EIS FUND
There is potential for a conflict to exist between Oberon EIS Fund and the Private Ventures team who may represent some of the constituent firms in the EIS Fund. In order to manage any potential conflict the following controls are in place:
1) Fees for Private Ventures and the IES Fund are agreed and documented and can be made available on request.
2) The wider market is frequently reviewed for pricing purposes. Oberon will always ensure its prices are fair yet competitive.
3) Oberon will never double charge i.e. charge for inclusion in the EIS Fund AND charge for general Private Ventures business.
4) Oberon will always make relevant disclosures where required.
5) An independent director will be made available to review and arbitrate any potential/actual conflicts.
CONFLICTS RELATING TO THE OBERON SPECIAL SITUATIONS FUND
The Oberon Special Situations Fund manager may have personal holdings in securities to be invested in by the fund. Should this situation occur, the fund manager will always make it clear to potential investors that his holdings may represent a conflict. The Oberon Special Situations Fund Manager will always adhere to insider dealing rules and may be unable to deal in certain securities where this may breach market abuse rules.
CONFLICTS RELATING TO NON-INDEPENDENT RESEARCH
A conflict may arise where Relevant Person trades in financial instruments that are the subject of nonindependent research, which they know the Firm has published or intends to publish before clients have had a reasonable opportunity to act on it (other than when the firm is acting as market maker in good faith and in the ordinary course of market making, or in the execution of an unsolicited client order); and the preparation of non-independent research which is intended first for internal use by the firm and then for later publication to clients. Oberon’s staff is not permitted to trade in financial instruments that are subject of non-independent research before clients have had a reasonable opportunity to act on it. Oberon maintains wall crossing within the group, its business activities and staff, and have policies and procedures in place to prevent unlawful disclosure and insider dealing.