Primebridge Brokers is a division of Zivest (Pty) Ltd which is a registered financial services provider (FSP 49689) in terms of the Financial Advisory & Intermediary Service Act and regulated by the Financial Sector Conduct Authority ("FSCA").
1. Purpose
Financial services providers (FSPs) authorised under the FAIS Act must take all necessary steps to eliminate any practices and services that may create a conflict of interest between their interests and the interests of an existing or potential client. The General Code of Conduct for Authorised Financial Services Providers and Representatives under the FAIS Act (GCOC) details the regulatory requirements for conflicts of interest. The GCOC requires all FSPs to disclose to their clients the existence of actual and potential conflicts of interest. The purpose of this Part of the Policy is to address conflict situations that may arise between Zivest, its registered representatives, other independent FSPs and Zivest clients. This Part establishes a framework within which actual or perceived conflicts of interest must be identified, reported, and addressed. It also determines the appropriate steps required to manage or mitigate the risk associated with such conflicts.
2. General
A. What is a conflict of interest for purposes of the FAIS Act? In relation to the rendering of a financial service to a client, a conflict of interest is any situation in which an FSP or a representative has an actual or potential interest that may: Influence the objective performance of the FSP or representative's obligations to that client. Prevent an FSP or representative from rendering an unbiased and fair financial service to that client. Prevent an FSP or representative from acting in the interests of that client. Such interests include, but are not limited to: A financial interest, which means: Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, other incentive, or valuable consideration, other than an ownership interest or training that is not exclusively available to a selected group of representatives. An ownership interest, which means: Any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than equity or a proprietary interest held as an approved nominee on behalf of another person; and Any dividend, profit share or similar benefit derived from that equity or ownership interest. Any relationship with a third party, which means any relationship with: A product supplier; Another FSP; An associate of a product supplier or a provider;
A distribution channel; and
Any person who, in terms of an agreement or arrangement with the person referred to above, provides a financial interest to a provider or its representatives. An immaterial financial interest is any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by: A provider who is a sole proprietor; or
A representative for that representative's direct benefit; or
A provider who, for its benefit or that of some or all its representatives, aggregates the immaterial financial interest paid to its representatives. Zivest must ensure that immaterial financial interests received by any tied representative are declared on Zivest's conflict of interest register.
B. Financial interests: tied representatives
A Zivest tied representative refers to a representative of Zivest, where Zivest and the product supplier are the same legal entity. A tied representative will include a person that is employed or mandated by Zivest to render financial services to that FSP's Zivest Group clients. Zivest may not offer any financial interest to a representative of that FSP: Where the interest is determined with reference to the quantity of business without also giving due regard to the delivery of fair outcomes for clients. Zivest must demonstrate that the determination of and entitlement to the financial interest considers measurable indicators relating to the: Achievement of minimum service level standards in respect of clients; Delivery of fair outcomes for clients; Quality of the representative's compliance with this Act. The above measurable indicators must be agreed upon between Zivest and the representative.
C. Financial interests: intermediaries
An intermediary refers to a representative of Zivest where Zivest is not also the product supplier, or a representative of an independent FSP. Zivest and intermediaries may only offer and receive specific financial interests from a third party, which includes the following: Commission authorised under the Long-term Insurance Act (52 of 1998), the Short-term Insurance Act (53 of 1998) and the Medical Schemes Act (131 of 1998). Fees authorised under the Long-term Insurance Act (52 of 1998), the Short-term Insurance Act (53 of 1998) and the Medical Schemes Act (131 of 1998). "Other fees" to which the amount, frequency, payment method, recipient of those fees and details of services to be provided are specifically agreed to in writing by the client and may be stopped by the client at their discretion. Fees or remuneration for services rendered to a third party. An immaterial interest. Any other financial interest not mentioned above. The fees referred to in points 3, 4, 5 and 6 above may only be paid if: The financial interests are reasonably commensurate (proportionate) to the service being rendered, considering the nature of the service and the resources, skills and competencies reasonably required to perform it; The payment of the financial interests does not result in the FSP or intermediary being remunerated more than once for performing a similar service; Any actual or potential conflicts between the interests of clients and the interests of the person receiving the financial interests are effectively mitigated; The payment of those financial interests does not impede the delivery of fair outcomes to clients. Zivest may not offer any financial interest to an intermediary: That is determined with reference to the quantity of business without also giving due regard to the delivery of fair outcomes for clients. Zivest must demonstrate that the determination of and entitlement to the financial interest considers measurable indicators relating to the: Achievement of minimum service level standards in respect of clients; For giving preference to a specific product of a product supplier, where a representative may recommend more than one product of that product supplier to a client; For giving preference to a specific product supplier, where a representative may recommend more than one product supplier to a client.
3. Management of conflicts of interest
A. Avoiding conflicts of interest
All representatives must ensure that as far as possible, any conflict of interest is avoided. Where a conflict of interest cannot be avoided: Steps must be taken to mitigate the conflict of interest. The conflict of interest must be disclosed on the respective FSP's conflict of interest register together with the reason as to why the conflict could not have been avoided.
B. Mandatory disclosure
A conflict of interest in respect of a client must be disclosed to that client in writing at the earliest possible opportunity. This disclosure must include the following: The conflict of interest in respect of the client; What has been done to avoid or mitigate the conflict; Any ownership or financial interest (other than an immaterial financial interest) that Zivest or a representative of Zivest may be eligible for or become eligible for; Details about any relationship with a third party that gives rise to conflict of interest. The details must be sufficient to enable the client to understand the exact nature of the relationship or arrangement and the extent of the conflict of interest. The client must be informed of the Conflict of Interest Policy and where they may access the policy.
C. Training and awareness
All representatives (existing and new) and key individuals must be made aware of the Conflict of Interest Policy and the contents thereof. Representatives and key individuals must receive the necessary training on the policy and the policy must be accessible to all representatives and key individuals. Key individuals and line managers must ensure that they read and understand this policy, the processes and procedures outlined in this policy, and any other documents the policy refers to. Group Compliance will assist in facilitating conflict of interest training as and where required.
D. Conflict of interest register and reporting
Zivest must implement and maintain a conflict of interest register and a process for disclosure of a conflict by representatives. Key individuals and line managers must ensure that they: Log any perceived or actual conflicts of interest on Zivest's conflict of interest (COI) register, in line with the respective FSP register requirements; Report any instance of non-compliance with this policy to Group Compliance. To monitor on-going compliance with the policy, all representatives, juristic representatives, and key individuals must sign an annual conflict of interest attestation. Group Compliance will monitor all disclosures logged on Zivest's conflict of interest registers and will report annually on conflict of interest, as required by the FAIS Act. Zivest views any non-compliance with this policy and any non-compliance with Zivest's legal obligations in a serious light. If an employee or a representative takes any deliberate action to contravene this policy or to breach Zivest's legal obligations, the employee or representative will be subject to disciplinary action.
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