PrimaryBid Summary Conflicts of Interest Policy

Introduction

 

PrimaryBid is required to produce a comprehensive Conflicts of Interest Policy, in accordance with FCA rules, covering the full range of its activities and the process undertaken to properly identify and manage potential conflicts of interest that may arise.

 

The purpose of this Summary Policy is:

 

  • To identify potential conflicts of interest that may arise in the course of our business – by “conflicts of interest”, we mean situations where what is most advantageous for our business or for our employees may potentially be disadvantageous to your interests as our clients or customers; and

 

  • To outline the procedures and measures that we have adopted to manage such conflicts with a view to ensuring that your interests are not subject to material risk of damage.


 

What conflicts may arise?

 

Because of the range of business activities undertaken, it is possible that conflicts of may arise:

 

  • Between our interests as a firm and your interests as our client
  • Between the interests of our employees and your interests as our client
  • Between your interests and the interests of other clients of the firm

 

Approach to dealing with Conflicts

 

We have a regulatory obligation to manage conflicts of interest fairly, between ourselves and our  clients and also between those companies seeking to raise finance and those clients looking to invest.  

 

The fact that we are involved with investors and with AIM-listed companies creates a number of conflicts.  Through our involvement with both sides of the transaction we may find that we are in conflict.  This could be as obvious as obtaining the best price for both sides.  The company wants to raise as much capital for the least amount of equity in order not to dilute their share price, Investors want to achieve the most equity for the least amount of investment.  We do not, however, have a client relationship with such companies as we treat them only as corporate finance contacts, whereas investors are our clients.

 

We may also find that our interests conflict with either party.  For example, our remuneration is a percentage of the funds we raise.  That could be dependent on the size of the book that PrimaryBid produces and therefore may disadvantage one or other party if we put our interests over that of the clients.  

 

While PrimaryBid neither advises the investors as to the amount they should bid for the equity, nor the company about its financing plans, these are conflicts that we need to monitor and manage carefully.

 

As soon as any employee identifies a conflict, or a potential conflict, they must escalate the issue to the Compliance Officer to establish the correct course of action.  All identified conflicts must be recorded in the Conflicts Register, owned by the Compliance Officer.  Where a conflict cannot be managed adequately, it must be disclosed to the client and, in extreme cases, PrimaryBid may be obliged to decline to act on the client’s behalf.

 

We identify below the conflicts of interest that may arise from our business and indicate the means by which we seek to ensure that those conflicts do not result in a material risk of detriment to you as our client.

 

Where we use a policy as the means that we use to manage a particular conflict, the purpose and content of that policy is briefly outlined in the next section of this document.

 

What measures has PrimaryBid put in place to manage its conflicts of interest?

 

The process of identifying conflicts and determining the measures required to manage them effectively is the responsibility of the Compliance Officer.  All of the Firm’s staff are aware of these procedures and understand their obligation to report any conflicts, or potential conflicts as soon as they become aware of them.  

 

PrimaryBid’s conflicts management mechanisms are periodically reviewed by the Compliance Officer to assess their ongoing effectiveness.

 

Among the conflicts management mechanisms referred to, there are a number of in-house policies – these are briefly outlined below:

 

 

  • Operation of Chinese Walls where required and Restricted Lists so that all market sensitive information received by any staff member affecting all other staff members will be governed by a Restricted  Dealing List. In exceptional cases (following approval by the CEO and CO),  practical arrangements may be put in place to ensure that certain staff who may receive confidential or non-public information are located away from other staff so as to ensure that there is no communication of non-public information.

 

 

  • Staff Dealing Policy in-house rules which set out the conditions under which its staff may engage in investment activity for their own account.

 

  • Gifts and Entertainment Policy in-house rules which limit the gifts and hospitality that members of staff may accept from third parties

 

  • Remuneration  incentive arrangements are structured so as to ensure that individuals are not influenced to act in ways contrary to the interests of our clients and customers.

 

  • External Directorships and business interests so that staff are required to seek permission before undertaking external roles.

 

  • Managing investments where either for itself or for a fund client there are inherent conflicts with duties owed to PrimaryBid clients which could arise in selling and timing of transactions are addressed in policies relating to its activities, including Order Execution and Treating Customers Fairly.

 

What happens in scenarios where PrimaryBid is unable to adequately manage its conflicts of interest?

 

In the unlikely event that the conflicts management mechanisms that we have put in place are not sufficient to prevent risk of damage to our clients’ interests, we will provide information to relevant clients about the nature and sources of such conflicts so that they can make informed decisions about whether they wish to continue with the business involved.

 

In some very rare instances, we may decide that neither conflicts management nor disclosure mechanisms are sufficient to counter the risk of material damage to client interests and may, as a result, decide not to proceed with a particular transaction or business activity.

 

Further Information

 

We have a firm-wide Conflicts of Interest Policy, which sets out in detail where conflict can arise and the factors and the mitigating controls that are put in place to manage those conflicts. The Policy has been approved by the Board of Directors of PrimaryBid and is available to all clients upon request.