Sweidan and Co, FSP Number 2078
In terms of the General Code of Conduct for Authorised Financial Services Providers and Representatives (General Code), Board Notice 80 of 2003 and subordinate legislation to the Financial Advisory and Intermediaries Services (FAIS) Act, 37 of 2002, Sweidan and Co is required to maintain and operate an effective organisational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conflict of interest in respect of their clients.
Sweidan and Co has put in place a policy to safeguard its clients' interests and also ensure a fair treatment of its clients which policy is available on request from the FSP, Compliance Officer and Key Individual who is responsible to monitor and manage conflict of interest on behalf of Sweidan and Co.
2. The FSP's Objectives
Sweidan and Co is a category I authorised financial services provider, providing to its clients a financial service which includes advice and/or intermediary services in respect of the following approved products:
||Long-Term Insurance: Category A
||Short-Term Insurance: Personal Lines
||Long-Term Insurance: Category B1
||Long-Term Insurance: Category B2
||Long-Term Insurance: Category C
||Retail Pension Benefits
||Short-Term Insurance: Commercial Lines
||Pension Fund Benefits
||Participatory Interests in Collective Investment Schemes
||Health Service Benefits
The nature of the above financial services provided by Sweidan and Co potentially exposes this FSP to conflicts of interests in respect of its clients and hence this Conflict of Interest Policy has been put in place to:
- identify circumstances which may give rise to actual or potential conflicts of interest entailing a material risk of damage to our client's interests;
- establish appropriate structures and systems to minimise and manage those conflicts; and
- maintain systems in order to prevent damage to our clients' interests through identified conflicts of interest.
3. Important definitions in respect of what a Conflict of Interest is
A Conflict of Interest is defined in section 1(1) of the General Code and subordinate legislation to the FAIS Act, means:
any situation in which a provider or a representative has an actual or potential interest that may, in rendering a financial service to a client:
- influence the objective performance of his, her or its obligations to that client, or
- prevent a provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client,
Including but not limited to:
- a financial interest;
- an ownership interest,
- any relationship with a third party
A financial interest is any: cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, foreign or domestic travel, hospitality, accommodation, sponsorship or any other incentive or valuable consideration; other than :
- an ownership interest or
- 2.1. products and legal matters related to the products,
- 2.2. general financial and industry information,
- 2.3. specialised technological systems of a third party required for the rendering of a financial service (excluding costs of training and accommodation associated with the training).
Ownership interest is:
- any equity or proprietary interest for which fair value was paid by the owner at time of acquisition (other than equity or proprietary interest held as a nominee)
- includes any dividend, profit share or similar benefit derived from that equity or ownership interest.
An Associate: in the case of a company, as “any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary.”
A third party is a product supplier, another provider, an associate of a product supplier or a provider, a distribution channel or any person acting in terms of an agreement or arrangement with any of the above, provides a financial interest to a provider or its representatives.
An Immaterial financial interest is any financial interest that has a determinable monetary value, the aggregate of which does not exceed R1, 000.00 in any calendar year, received from a particular third party by: a sole proprietor, a provider, for its benefit or for some or all of its representatives’ benefit, aggregates the immaterial financial interest paid to its representatives.
Sweidan and Co strives toward ensuring it is able to appropriately and effectively identify and manage potential conflicts through avoidance, establishing confidentiality barriers and providing appropriate disclosure of the conflict to affected clients.
Sweidan and Co identifies a conflict of interest where there is a material risk of damage to a client, taking into account whether the FSP, or a representative or employee of the FSP:
- is likely to make a financial gain, or avoid a financial loss at the expense of the client;
- has an interest in the outcome of a service provided to a client or of a transaction carried out on behalf of a client, which is distinct from the client's interest in that outcome;
- has a financial or other incentive to favour the interest of another client, group of clients or any other third party over the interests of the client;
- receives or will receive from a person other than the client, an inducement in relation to a service provided to the client in the form of monies, goods or services, other than the legislated commission or reasonable fee for that service.
Our policy defines possible conflicts of interests as:
- conflicts of interests between Sweidan and Co and the client;
- conflicts of interests between our clients if we are acting for different clients and their different interests conflict materially;
- conflicts of interests where product suppliers, distribution channels or any other third party is involved in the rendering of a financial service to a client;
- holding confidential information on clients, which if disclosed or used, would affect the advice or services provided to clients.
4. Management of Conflict of Interests
Section 3A of the General Code of Conduct for Authorised Financial Services Providers and Representatives, Board Notice 80 of 2003 and subordinate legislation to the Financial Services and Intermediaries Services Act, 37 of 2002 deals specifically with financial interest and conflict of interest management policy.
Sweidan and Co focuses on the following monetary measures:
- only receiving commission authorised in terms of applicable legislation; or
- fees authorised in terms of applicable legislation or fees or remuneration for services rendered to a third party which fees are reasonably commensurate in relation to the service rendered; or
- fees for the rendering of a service in respect of which neither commission or fees as mentioned above are paid, with these fees being specifically agreed to by the client in writing and may be stopped at the discretion of the client; or
- a limited immaterial financial interest as defined; or
- a financial interest for a consideration or fair value that is reasonably commensurate to the value of the financial interest that is paid by the provider or representative at time of receipt thereof.
Sweidan and Co will not offer any financial interest to a representative for:
- giving preference to the quantity of business secured for the provider to the exclusion of quality;
- giving preference to a specific product supplier where more than one supplier can be recommended to a client;
- giving preference to a specific product of a supplier where more than one product of that supplier can be recommended.
Sweidan and Co must ensure that we act impartially in respect of the identification of each conflict of interest to avoid material risk of harming client's interests and to this end the following measures have been adopted:
We have adopted appropriate procedures throughout our business to manage potential conflict of interest. Our representatives and employees receive guidance and training in these procedures and they are subject to monitoring. There are specific measures and consequences in place for non-compliance with our conflict of interest policy.
- Confidentiality barriers
Our representatives and employees respect the confidentiality of client information and disclose or us it with circumspect. No such information
may be disclosed to a third party without the client's written consent.
Walter Robinson, the key Individual is in charge of supervision and together with Carl Hartmann, the Compliance Officer will monitor this policy will provide regular feedback on any related matters. This policy will be reviewed annually.
Where there is no other way of managing a conflict or where the measures adopted do not sufficiently protect the clients' interests, the conflict must be disclosed to allow the client to make any informed decision on whether to continue using our services in the particular situation. In all cases where appropriate and where determinable, the monetary value of all non-cash inducements will be disclosed to clients.
We will publish our conflict of interest management policy in appropriate media and ensure that it is easily accessible for public inspection at all reasonable times.
Walter Robinson, the key individual and Carl Hartmann, the compliance officer will include a report on the conflict of interest management policy in the annual compliance report to the Registrar.
- Declining to act
We may decline to act for a client in cases where we believe a conflict of interest cannot be managed or minimised in any other way.
5. Application of this Conflict of Interest Policy
Sweidan and Co:
- has created an awareness, understanding and knowledge of the Conflict of Interests principles as dealt with in the General Code of Conduct for Authorised Financial Services Providers and Representatives, Board Notice 80 of 2003 and subordinate legislation to the Financial Services and Intermediaries Services Act, 37 of 2002 through training and educational material with such training being recorded;
- has ensured an adoption of this conflict of interest policy and management measures by all employees, representatives and associates;
- does regular inspections on all commissions, remuneration, fees and financial interests proposed or received in order to avoid non- compliance;
- keep a register of conflicts of interests and gifts/non-cash incentives or immaterial interests;
- keep a register of premature cancellations;
- keep a register of associates;
- keep a register of third parties with an interest in Sweidan and Co or a third party in whom Sweidan and Co holds an ownership interest.
6. Consequences of Non-Compliance
Due to the stringent reporting requirements, all applicable penalties including fines and suspension of the financial services provider’s licence may be applied for non-compliance.
Sweidan and Co regards breach of this Conflict of Interest as a material breach of any employment or mandated contract the consequences of which will be a disciplinary enquiry which could result in dismissal and/or debarment due to staff no longer being fit and proper due to honesty and integrity being placed in question.