In terms of the General Code of Conduct for Authorised Financial Services Providers and Representatives, as amended ("the Code"), promulgated in terms of the provisions of the Financial Advisors and Intermediary Services Act (Act No. 37 of 2002 – “the FAIS Act”) financial services providers must take all necessary steps to eliminate any practices and/or services that may create a conflict between their interests and the interests of an existing or potential client.
Conflict of interest situations must be avoided.
In addition, the Code requires that where it is not possible to avoid any act, action or reward that may create a potential conflict of interest, appropriate steps must be taken to mitigate the impact and it must be appropriately disclosed to the client at the earliest reasonable opportunity.
The FAIS Act prohibits the exchange of certain financial interests such as cash, vouchers, gifts to the total value of over R1000 per annum, domestic or foreign travel, accommodation, sponsorship or other incentives or valuable consideration.
This Policy sets out the management of any such conflicts of interests:
- the mechanisms used to identify such conflicts,
- the measures for avoidance and disclosure,
- processes and procedures for compliance with the Policy, and
- the consequences of non-compliance to the Policy.
The Policy also contains details of the types of financial interests a STANLIB representative receives and the basis on which it is received.
The Policy also contains a list of all associates of STANLIB and third parties in which STANLIB holds an ownership interest or that hold an ownership interest in STANLIB.
Identification and management of Conflicts
STANLIB shall use all reasonable measures to ensure that it is able to identify and manage actual and potential conflicts.
A conflict of interest is any situation in which STANLIB or its representative has an actual or potential interest that may, in rendering a financial service to a client:
- influence the objective performance of its obligations to that client; or
- prevent STANLIB or the representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of the client;
It includes receiving a wide range of financial and non-financial benefits, ownership interests and any relationship with a third party.
Although this is not a comprehensive list, the primary methods that STANLIB may use to manage and detect actual or potential conflicts of interest include:
- STANLIB has an independent Compliance Department who has a responsibility to monitor the identification, avoidance and the management of conflicts of interest;
- procedures and systems to identify specific situations where there are competing or adverse interests;
- trade surveillance and restriction systems and procedures, including insider trading and restricted lists to monitor the flow of inside information within STANLIB and to prohibit employees from misusing such information for STANLIB’s benefit or to the detriment of clients;
- regulation of personal investment and business activities of STANLIB employees to prevent conflicts of interest arising against the interest of clients;
- training of employees, by the Compliance and Training departments;
- The general or specific disclosure of conflicts of interest to clients where necessary, including but not limited to, instances where it is not considered not possible to have sufficient arrangements to avoid a conflict of interest.
- Training and awareness on how conflicts of interest may arise and how it can be avoided is provided to all representatives.
- Business units are required to implement and maintain appropriate record keeping systems to which STANLIB compliance will have unlimited access. STANLIB compliance monitors all financial interests received by its representatives, as part of STANLIB’s overall compliance monitoring program.
- Business units are required to implement and maintain appropriate record keeping systems to which STANLIB compliance will have unlimited access. STANLIB compliance monitors all financial interests offered to/received from IFA’s and third parties, as part of STANLIB’s overall compliance monitoring program.
- Non-compliance incidents are escalated to the relevant STANLIB governance structures.
Measures for the avoidance of Conflicts
STANLIB shall at all times be cognisant of the duty it owes to its clients and shall endeavour to ensure that any conflicts of interest are resolved fairly.
Specific training and educational material on how conflicts of interest may arise and how it can be avoided is provided to all new representatives. Ongoing training is also provided to all existing representatives.
Where a conflict cannot be avoided, STANLIB's representatives are required to make a written disclosure of such a conflict to their (potential) clients at the earliest reasonable opportunity, together with measures that were taken to mitigate the situation. Any such disclosures are required to be signed off by a STANLIB compliance officer.
Every (potential) client has the right to ask a STANLIB representative for further details regarding such disclosures. A (potential) client’s rights and the protection offered under the code may not be waived.
Business units are required to implement and maintain appropriate record keeping systems to which STANLIB compliance will have unlimited access. STANLIB compliance monitors all financial interests received by its representatives, as part of STANLIB's overall compliance monitoring programme.
Business units are required to implement and maintain appropriate record keeping systems to which STANLIB compliance will have unlimited access. STANLIB’s compliance monitors all financial interests offered to/received from Independent Financial Advisors and third parties as part of STANLIB’s overall compliance monitoring programme.
STANLIB has various policies and procedures in terms of which potential conflicts of interest are avoided or managed.
Personal Account Trading
Although employees are entitled to profit from personal investment in trades it is important for STANLIB to ensure that such trades do not create a potential for a conflict of interest, the appearance of such conflict or permit employees to benefit from trades that are performed on behalf of clients e.g. by way of front-running.
All STANLIB employees are required to adhere to the STANLIB’s Code of Conduct in respect of Personal Investment Transactions. In terms of the Code employees are required to obtain pre-trade approval before buying or selling ordinary shares, preference shares, fixed interest bonds, inflation-linked bonds, convertible securities, futures, options, warrants, swaps or any other financial instruments for their own account or for the account of any member of their family or any investment entity in whom they have an interest.
Employees are required to hold onto any securities purchased for at least 60 calendar days after purchase.
The STANLIB Risk and Compliance functions endeavour to audit personal account transactions at least once a year by comparing approved trades against a download from the JSE. However, the availability of data from the JSE is subject to system and time constraints experienced by the JSE.
In accordance with STANLIB’s Gift Policy, all gifts made and received, by all STANLIB staff, that exceed a specified threshold are recorded in the Gift Register. However, all STANLIB staff that have been nominated as Key Individuals and Representatives of the various STANLIB businesses are prohibited from accepting gifts and any other financial interests (including training) from a third party unless they have obtained prior approval from STANLIB Compliance, irrespective of the value of such financial interest.
All STANLIB staff that have been nominated as Key Individuals and Representatives of the various STANLIB businesses are prohibited from accepting any further financial interests from a third party once the threshold, as determined by the FAIS Act, has been reached. All STANLIB staff that have been nominated as Key Individuals and Representatives of the various STANLIB businesses are however free to accept and attend invitations to such activities, that constitute a financial interest, as determined by the FAIS Act, at their own expense.
Disclosure of Conflicts
Where a conflict of interest cannot be avoided, STANLIB shall notify all affected clients in writing within a reasonable time upon the occurrence of a Conflict of Interests.
Every (potential) client has the right to ask STANLIB for further details regarding such disclosures. A (potential) client’s rights and the protection offered under the Code may not be waivered.
Processes and procedures for compliance
STANLIB has adopted a governance process that requires executive management to ensure compliance to this Policy:
Chief Executive Officer
The Group Chief Executive Officer is accountable for the implementation and compliance with this Policy within STANLIB.
Head of Risk
The Head of Risk is accountable for the maintenance of this Policy within the context of changing business practises and a changing regulatory environment.
Business Unit Heads
The Business Unit Heads are accountable for ensuring compliance with this Policy as an integral part of operations and risk management within their business units.
STANLIB’s appointed Key Individuals under the Code are accountable for ensuring compliance by representatives listed on the representative registers under their control as required in terms of the provisions of the FAIS Act.
Executive Officer, Group Internal Audit Services
The Executive Officer, Group Internal Audit Services is accountable for assurance to the board of directors on the adequacy and effectiveness of STANLIB’s internal and compliance controls relating to conflicts of interest.
Risk & Compliance Management Framework
STANLIB has included conflict of interest monitoring in its Risk and Compliance Monitoring Programme which forms part of STANLIB’s Risk & Compliance Management Framework. The Risk and Compliance Monitoring Programme is reviewed annually and STANLIB’s Group Compliance function regularly reports to management in terms of the programme. The compliance department shall conduct annual reviews on STANLIB’s compliance with this Policy.
(Potential) clients may also direct questions and complaints concerning the application of this Policy to STANLIB’s Contact Centre via e-mail. The e-mail address that may be used is: email@example.com.
Appropriate training shall be provided to all STANLIB staff to ensure that all staff members are aware of the contents of this Policy and their duties in terms thereof.
Consequences of non-compliance
Non-compliance to this Policy will be dealt with in terms of STANLIB’s disciplinary policies.
Non-compliance by employees
All STANLIB employees who do not comply with this Policy will be subject to STANLIB’s internal employee disciplinary procedures.
Non-compliance by representatives
All STANLIB representatives who do not comply with this Policy will be subject to the processes and procedures applicable to representatives under the FAIS Act, in addition to STANLIB’s internal employee disciplinary procedures.
- All STANLIB representatives are employees of the STANLIB group and are remunerated in accordance with their conditions of employment.
- Intermediaries mandated by STANLIB Wealth Management Clients receive fees from the Client in accordance with 3A(1)(a)(iv) of the Code;
- Intermediaries mandated by STANLIB Collective Investment Clients receive remuneration in accordance with 3A(1)(a)(v) of the Code.
List of associates
STANLIB has the following associates:
- Standard Bank Group Ltd
- Liberty Holdings Ltd
- Liberty Group Ltd
- Liberty Group Properties (Pty) Ltd
- Liberty Health Holdings (Pty) Ltd
- Liberty Holdings Namibia (Pty) Ltd
- CfC Insurance Holdings Ltd
- STANLIB Asset Management Ltd
- STANLIB Collective Investments Ltd
- STANLIB Wealth Management Ltd
- STANLIB Wealth Management Nominees (Pty) Ltd
- Lodestone Holdings (Pty) Ltd
- STANLIB Multi Manager Ltd.
- STANLIB Credit Partners (Pty) Ltd
- Stonehouse Capital (Pty) Ltd
List of ownership interests
STANLIB Ltd holds an ownership interest in the following third parties:
- STANLIB Asset Management Ltd, 100% shareholding and who owns 100% of STANLIB Credit Partners (Pty) Ltd
- STANLIB Collective Investments Ltd, 100% shareholding
- STANLIB Wealth Management Ltd, 100% shareholding and which owns 100% of STANLIB Wealth Management Nominees (Pty) Ltd
- Lodestone Holdings (Pty) Ltd, 100% shareholding and which owns 100% of STANLIB Multi Manager Ltd
- The following third party holds an ownership interest in STANLIB Ltd:
Liberty Holdings Ltd, 100% shareholding.