In accordance with the General Code of Conduct for financial services providers under the Financial Advisory and Intermediary Services Act, 2002 (FAIS) and with Treating Customers Fairly (TCF), Catalyst Fund Managers SA (Pty) Ltd, Catalyst Fund Managers Global (Pty) Ltd and Catalyst Fund Managers Alternative Investments (Pty) Ltd (Collectively referred to as Catalyst Fund Managers) are obliged to comply with the applicable requirements as stipulated in this Conflicts of Interest Management Policy in their capacity as licensed financial services providers. As conflicts of interest affecting clients could undermine the integrity and professionalism of our business, any instances must be identified as early as possible. If conflict situations cannot be avoided, they must be managed equitably and in the client’s interest. Detecting potential or recognised conflicts of interest that could compromise the interest of its clients and managing and limiting the impact of conflicts of interest therefore constitute an integral part of Catalyst Fund Managers’ duties and obligations. The Conflict of Interest Policy as outlined below applies to Catalyst Fund Managers.
- Conflict of interest:
What do we mean by this?
A conflict of interest is a situation in which the interests of Catalyst Fund Managers or of its associates, in the exercise of its activities, and the interests of its clients, are directly or indirectly in competition, and which could significantly prejudice the client’s interests. This notion concerns Catalyst Fund Managers in its capacity as an investment manager, all individuals working for Catalyst Fund Managers (employees, associates, service providers, etc.), and the Catalyst Fund Managers businesses (major shareholders, companies controlled by the Group, etc.). A conflict of interest may occur in the provision of an investment service (management under mandate, fund management and advisory services). A conflict of interest may be recognised (identified) or potential (conceivable).
The notion of conflict of interest encompasses a range of very diverse factors such as:
- Rules regarding personal transactions,
- Professional ethics of employees,
- The use of sensitive or privileged information, insider dealing, and professional secrecy,
- Respect for clients’ interests,
- Respect for professional obligations in relation to the market and specific to Catalyst Fund Managers.
- Conflicts of interest:
What is a conflict of interest situation? Conflict of interest situations that could prejudice a client may take a variety of forms, if Catalyst Fund Managers suffers any financial loss and independently of whether the actions or the motivations of the employees involved are intentional. At least five types of situation are defined by Catalyst Fund Managers to help determine whether a potential conflict of interest situation might occur:
- Catalyst Fund Managers, a department or an employee will realise a financial gain or avoid a potential loss at the client’s expense,
- The interest of Catalyst Fund Managers, a department or an employee may be different from the client’s interest,
- Catalyst Fund Managers or an employee exercises the same professional activity as the client,
- Catalyst Fund Managers, a department or an employee is induced to favour one client over another (whether for financial reasons or otherwise),
- Catalyst Fund Managers, a department or an employee will gain an advantage (financial or in kind) from a third party in the execution of the service conducted on behalf of the client.
III. Conflicts of interest:
Prevention, detection and management
Catalyst Fund Managers has identified specific potential conflicts of interest in relation to its activities. These may be encountered by Catalyst Fund Managers or its associates when they deliver their services to clients. For each situation, Catalyst Fund Managers has analysed whether the risk is actual or potential for one or more of its clients. To handle potential or actual conflict of interest situations, Catalyst Fund Managers may:
- Conduct the transaction while, given the conflict of interest generated by it, implementing procedures that enable appropriate management of the situation to avoid damaging the interests of the client in question
- Avoid conducting the transaction that would potentially generate a conflict of interest
- Inform the client if certain conflicts of interest cannot be properly handled and communicate the necessary information about the type and origin of the conflict of interest to the client, so that the client can make a fully informed decision regarding the proposed transaction.
Catalyst Fund Managers has established a management policy for conflicts of interest enabling it to prevent potential conflicts of interest, manage actual conflicts of interest and communicating them effectively to clients. This policy is based on a system of prevention, detection, management, communication and recording conflicts of interest.
Our conflicts management framework document is available to all clients upon request.
Training: Catalyst Fund Managers informs its associates and makes them aware of the undertakings and restrictions concerning their actions about the conflict of interest management policy in place at the management company. Awareness training is provided to staff.
Detection: Catalyst Fund Managers has drawn up a list of recognised and potential conflicts of interest, by recording conflicts of interest and identifying the types of situations generating the conflicts and the associated risks.
Procedure if a conflict of interest arises:
The Chief Executive Officer is responsible for the operation and condition of the conflicts of interest register. If a new potential or actual conflict of interest should arise, the Chief Executive Officer, will send a memo to the management of the department and members of Catalyst Fund Managers so that the transaction that could potentially generate a conflict of interest may be accepted or declined, and managed in the client’s interest. If a conflict of interest cannot be properly managed, the necessary information on the type and origin of the conflict of interest will be communicated to the client, to enable the client to make a fully informed decision. All the documents and supporting evidence will be archived.
In general, all measures and complementary procedures will be taken to ensure the required level of independence.
Management: Catalyst Fund Managers manages potential and actual conflict of interest situations based on the following:
Ethical principles = Predominant among these rules are the principles of client sovereignty, equity, impartiality, respect for professional secrecy, market integrity and compliance with laws and regulations.
- A control system to ensure monitoring of the conflicts of interest and corrective measures taken. In this respect, Catalyst Fund Managers has procedures detailing the concrete measures to manage potential or recognised conflicts of interest in the interest of clients.
- Separation of functions to ensure independence of actions (a Chinese wall). (if applicable)
- Prohibition or control of multiple activities exercised by associates.
- Prohibition or control of remunerated advisory activities of associates with respect to companies whose securities are held in an undertaking.
- Ownership Interests
- Catalyst Fund Managers (Pty)Ltd
- Sanlam Investment Holdings (Pty) Ltd 68.89%
- Zayd Sulaiman 6.66%
- STA Investments (Pty) Ltd 5.54%
- Michael Arbuthnot (Executive Director) 5.57%
- Jamie Boyes 5.78%
- Paul Duncan 2.76%
- Staff shareholding 4.79%
- Catalyst Fund Managers SA (Pty) Ltd
- Catalyst Fund Managers (Pty) Ltd 84.91%
- BEE Staff Trust 10.09%
- Thando Sishuba (Non-executive director) 5.00%
- Catalyst Fund Managers Global (Pty) Ltd
- Catalyst Fund Managers (Pty) Ltd 100%
- Catalyst Fund Managers Alternative Investments (Pty) Ltd
- Catalyst Real Estate Financial Services (Pty) Ltd 47.51%
- Paul Duncan (Executive Director) 25.45%
- STA Investments (Pty) Ltd 25.58%
- Michael Arbuthnot (Executive Director) 1.46%