Conflict of Interest Management Policy
1. Regulatory Context
Truffle Capital is an investment services provider that carries on the regulated business of a management company. To this end, it is approved by the Autorité des Marchés Financiers (AMF) under number GP-01029.
In this capacity, it offers the following investment services in particular:
- The management of FIA within the meaning of Directive n°2011/61/EU (AIFM Directive)
- Portfolio management on behalf of third parties within the meaning of Directive 2004/39/EC (MiFID Directive)
- Investment advice
As regards the management of conflicts of interest, it is governed by Articles 313-18 et seq. of the AMF General Regulations. In particular, Article 313-20 of the AMF General Regulation imposes an obligation “to establish and maintain an effective policy for managing conflicts of interest”. This policy must be set out in writing and must be appropriate to the size, organisation, nature, importance and complexity of the management company’s business.
2. What is a “conflict of interest”?
A conflict of interest is defined as a situation in which the interests of Truffle Capital or its employees are in competition with those of its clients or with those of the UCITS for which it is responsible for financial management.
Conflicts of interest against them can cast doubt on the integrity and professionalism of our company. Therefore, their eventualities must be identified as soon as possible. If they cannot be avoided, any conflict situation must be managed fairly and in the client’s interest.
In this perspective, identifying potential or actual conflicts of interest that may harm the interests of its clients and managing and limiting the impact of these conflicts of interest are an integral part of Truffle Capital’s duties and obligations.
The conflict of interest can be proven (actual) or potential (potential).
The notion of conflict of interest covers very diverse elements such as :
- The rules relating to personal transactions, remuneration, the circulation of information…
- Professional ethics of employees,
- The use of sensitive and/or privileged information, market abuse, professional secrecy.
- Respect for the interests of clients,
- Compliance with professional and market obligations as well as those specific to the management company.
3. The different situations of conflict interests
Conflict of interest situation prejudicial to the client can take various forms, that Truffle Capital incur a loss and independently to the intentional nature of the actions taken or employees motivations involved.
-Five types of situation must be at least planned by Truffle Capital, in order to assess the existence of conflict interest that is likely to occur.
- The management company or an employee makes a financial gain or avoid a potential loss at the expense of the client,
- The management company or an employee interest may be different from the client,
- The management company or an employee pursues the same professional activity,
- The management company or an employee is encouraged to favor one client over another (regardless of financial or other reasons),
- The management company or an employee benefits from an advantage (financial or fringe benefit) given by a third party for the performance of the service performed on behalf of the client.
4. Devices to prevent conflicts of interest
Truffle Capital has set up an organization designed to prevent conflicts of interest that may arise in the course of its various regulated activities. This system is articulated in four points:
– Compliance/compliance device :
The compliance function (RCCI) is responsible for controlling the conflict of interest management system through compliance with legal and regulatory provisions, professional standards and those defined by the management company. Second in line is the Director of Operations and Risk Management, whose role is to supervise all aspects of risk and compliance of the management company in the provision of its investment services.
– Training device :
The management company shall inform and make its employees aware of its system for managing conflicts of interest set up within the management company. In addition, each employee must pass the AMF certification examination within six months of their arrival, familiarise themselves with the ethical rules implemented within the management company, comply with the obligations imposed accordingly (mandatory training, mandatory declarations to the Compliance Department of external activities or corporate offices, gifts or benefits received, personal transactions) and declare any situation that would put them in a conflict of interest situation.
– Conflict of interest detection system :
The management company has carried out an inventory of actual and potential conflicts of interest internally, through a conflict of interest mapping identifying (i) the types of conflict situations, the associated risks and (ii) the associated procedures for controlling them.
– Incident monitoring system :
The RCCI is empowered to manage any escalation of conflicts of interest. The RCCI may alert the general management of the management company of any incident at any time and by any means. The RCCI can ask to stop any incident. Thus, employees who detect a situation that could be analyzed as a “conflict of interest” situation are required to notify the RCCI without delay. The file relating to the events giving rise to the conflict of interest situation, the verifications carried out, the RCCI’s recommendation and the decision taken are archived. In addition, pursuant to Articles 13 to 15 of Directive 2006/73/EC, Truffle Capital ensures that its external service providers apply, where necessary, rules equivalent to the conflict of interest management policy set out in this document, rules which must be set out in the contractual agreement for the said service.
– Customer information:
When the risk of harming the client’s interests cannot be controlled despite the conflict of interest management procedures and measures that have been put in place, Truffle Capital informs the client of the existence of a conflict of interest. However, before using the ultimate recourse to a client’s information, it is absolutely necessary to seek, in advance, all preventive means to resolve the said conflict. This possible information of the customer is carried out on a durable support which is preserved during at least 5 years. It must also be sufficiently precise and detailed to enable the client to make an informed decision on the provision of the proposed investment product or service.
5. Updating the conflict of interest management policy
Truffle Capital updates its conflict of interest management policy on a regular basis to take into account as appropriate:
- Legislative and regulatory developments;
- The entry into force of new professional standards ;
- Any changes in the activity, organisation, processes and procedures within the management company.
Any additional information on this conflict of interest prevention and resolution policy may be obtained by clients by sending a written request to Truffle Capital.
Procedure for selecting and evaluating financial intermediaries
Pursuant to Article L. 533-18 of the Monetary and Financial Code transposing Article 21 of Directive 2004/39/EC on markets in financial instruments (MiFID) and Articles 314-75 and 314-75-1 of the AMF General Regulations, TRUFFLE CAPITAL has established and implemented a policy for selecting and evaluating the entities that provide the services mentioned in b du 1° of Article 314-79 of the said Regulation, in order to act in the best interests of its clients. Within the framework of this policy, TRUFFLE CAPITAL favours having a diversified brokerage and not concentrated on a financial intermediary. In addition, TRUFFLE CAPITAL asks intermediaries to select its categorization as a “professional client” which imposes on them the obligation of “best execution” with respect to our company.
The selection of financial intermediaries is based on the following criteria:
- Execution of orders,
- Back Office.
All counterparties and intermediaries are assessed every six months on the basis of the evaluation criteria adopted above and obtain a rating that serves as a brokerage allocation key.
6. Handling of customer complaints and requests
As a portfolio management company, Truffle Capital is required to establish and maintain an efficient and transparent procedure for the reasonable and prompt handling of complaints from its clients (Article 313-8 of the AMF General Regulation).
In accordance with the regulations, any person wishing to make a complaint may contact the management company free of charge by writing to the following address: 5, rue de la Baume, 75008 Paris, or by telephone on 01 82 28 46 00.
Truffle Capital acknowledges receipt of the claim to its issuer within 10 days and records the claim in the claims tracking file.
After analysis and processing, the management company provides a response to the client within a maximum period of 2 months from receipt of the complaint.
In accordance with the regulations, Truffle Capital also informs the AMF Ombudsman of the possibility of sending the complaint to the following address: 17, place de la Bourse, 75082 Paris Cedex 02, France.
Contact Truffle Capital
5 Rue de la Baume, 75008 Paris, France
Tel: +33 1 82 28 46 00