Conflicts of Interest Management Policy
BBP’s Conflicts of Interest Management Policy provides guidance for the management of conflicts of interest which arise in relation to the activities of BBP and its representatives and staff.
The Policy is intended to:
- provide a framework to enable staff to identify actual, apparent and potential conflicts of interest that may arise wholly or partially in connection with the provision of financial services;
- assist staff in determining how to most appropriately address those conflicts of interest; and
- minimise the potential adverse impact of conflicts of interest on BBP securityholders,
with the objective that BBP and its representatives and staff provide financial services efficiently, honestly, fairly and professionally at all times and maintain a reputation for integrity in the provision of financial services.
It is important to note that BBP’s obligation to manage conflicts of interest does not prohibit conflicts of interest or require that BBP can never provide financial services if a conflict of interest exists. What is required is that conflicts of interest are appropriately identified and managed. However, where a conflict cannot be adequately managed through controls and/or disclosure, BBP must avoid the conflict or refrain from providing the affected financial service.
The usual mechanisms used by BBP to determine and manage conflicts of interest are:
(a) identifying the conflict relating to the financial service;
(b) assessing and evaluating the conflict; and then implementing one or more of the following responses to the conflict:
(c) controlling the conflict;
(d) avoiding the conflict; and/or
(e) disclosing the conflict.
Identifying and assessing conflicts of interest
Before any management of conflicts of interest can be undertaken, those conflicts must first be identified and assessed. All staff are expected to be able to identify actual or potential conflicts of interest.
It is often difficult for staff who are directly involved in the provision of a financial service to fully identify conflicts of interest. If a staff member suspects or is unsure in relation to any potential conflict of interest, they are expected to refer the matter to the Legal Counsel/Compliance Manager for consideration. The staff member will make available all information relevant to the consideration of whether a conflict of interest exists and the evaluation of that conflict.
In the event that a conflict of interest is identified, the level of materiality of that conflict must then be assessed. If a conflict has a low level of materiality, then little or no action may be required to address it. If the conflict is of an intermediate level, then it may be capable of being managed through controls and/or disclosure. If the conflict is of a serious nature, then the appropriate course is likely to be to avoid the conflict altogether.
Controlling conflicts of interest
Once a conflict of interest has been identified, an appropriate control must be applied so as to ensure that the quality of the financial services being provided is not compromised. Such controls may include:
- disclosing the conflict of interest;
- avoiding the conflict by declining to provide the financial service;
- allocating another representative or representatives to provide the service; or
- implementing appropriate “Chinese walls” to ensure that the service is provided by representatives who are partitioned from other staff, information and circumstances which give rise to the conflict.
The Legal Counsel/Compliance Manager will be primarily responsible for determining the appropriate controls to be applied to a conflict of interest.
In the event of serious conflicts of interest which are likely to have a material adverse effect on securityholders and/or the quality of financial services provided, the Legal Counsel/Compliance Manager is required to escalate the matter in accordance with prescribed procedures.
Avoiding conflicts of interest
Any conflicts which have a serious potential impact on BBP and/or its securityholders must be avoided. In such cases, attempts to manage the conflict or to effect disclosure is likely to be an insufficient measure. In accordance with the Corporations Act, BBP gives priority to the interests of its securityholders over the interests of itself in the event of any conflict.
The Legal Counsel/Compliance Manager for BBP is primarily responsible for determining whether a conflict of interest should be avoided and, if so, how to implement that determination.
Disclosing conflicts of interest
BBP and its staff need to ensure that securityholders are adequately informed about any material conflicts of interest that may affect the provision of financial services to them. This is achieved through disclosure of sufficient information relating to those conflicts.
Such disclosure must be sufficiently detailed in a clear and effective manner so as to enable the clear understanding of the nature of the conflict and the extent to which it might affect the provision of financial services. Such disclosure should:
- be timely, so that it occurs before or when the financial service is provided, but in any case at a time that allows a securityholder a reasonable time to assess the effect of the conflict;
- be in a form which is prominent, specific and meaningful to the securityholder; and
- refer to the specific service to which the conflict relates.
In each case where one or more actual or potential conflicts of interest are to be disclosed, the assessment of what disclosures are appropriate will depend on all the facts and circumstances, including the nature of the conflicts and the sophistication of the relevant securityholders.
BBP recognises that, in some circumstances, disclosure of conflicts of interest will be inappropriate. For example, information which by law or contract must be kept confidential, or which comprises “inside information” for the purposes of the insider trading laws, must not be disclosed to third parties. In those instances, any conflict of interest will need to be managed without disclosing the confidential information or, if that is not possible, avoided.
Monitoring and record keeping
BBP’s Compliance Manager maintains a Conflicts Register. The Conflicts Register records:
- all conflicts identified;
- what actions have been taken in relation to the identified conflicts;
- copies of any written conflict of interest disclosures made to clients or third parties; and
- details of any breaches of this policy.
Staff must cooperate with and make available copies of all relevant documents to the Compliance Manager. Should any staff member create or obtain copies of any documents described above, they must forward a copy of each such document to the Compliance Manager. The above records must be retained for a minimum of seven years.
Staff training
It is important to ensure that staff remain aware of their responsibilities in relation to conflicts of interest as set out in the Policy and actively discharge those responsibilities. The Compliance Manager will arrange periodic training sessions to further educate staff as to their conflicts of interest responsibilities and to assist staff in identifying conflicts of interest and assessing the materiality of those conflicts.
General
The Compliance Manager in conjunction with the Legal Counsel is primarily responsible for the administration of the Policy as it relates to BBP. In this regard, they are responsible for:
- the general coordination, administration and implementation of the Policy;
- identifying conflicts of interest as they relate to BBP;
- assessing and evaluating identified conflicts of interest and ensuring that an appropriate response is implemented in accordance with the Policy;
- deciding whether a conflict should be escalated; and
- maintaining the Conflicts Register.