Regulatory Information

Conflict of Interest Management Policy

1. Regulatory background:

Truffle Capital is an investment services provider which performs the regulated activity of a management company. In this respect, it is accredited by the French Financial Markets Authority (Autorité des Marchés Financiers – AMF) under number GP-01029.

In this capacity, it mainly provides the following investment services:

  • AIF management within the meaning of Directive 2011/61/EU (AIFM Directive)
  • Third-party portfolio management within the meaning of Directive 2004/39/EC (MiFID Directive)
  • Investment advice

As regards conflict of interest management, it is governed by Articles 313-18 et seq. of the Financial Markets Authority’s General Regulations. In particular, Article 313-20 of the Financial Markets Authority’s General Regulations lays down the obligation to “establish and maintain an effective conflicts of interest policy”. This policy must be set out in writing and be appropriate to the size, organisation, nature, scale and complexity of the business performed by the management company.

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 compete with the interests of its clients or the UCITS for which it is responsible for the financial management.

Conflicts of interest affecting them may cast doubt on our company’s integrity and professional approach. Therefore, a potential conflict of interest must be identified at the earliest possible opportunity. If they cannot be avoided, any conflictual situation must be managed fairly and in the interests of the client.

In this regard, identifying potential or actual conflicts of interest which may cause harm to the interests of its clients, managing and limiting the impact of these conflicts of interest form an integral part of Truffle Capital’s duties and obligations.

The conflict of interest may be actual (effectively recorded) or potential (possible).

The concept of a conflict of interest covers a wide range of elements such as:

  • Rules relating to personal transactions, remuneration and flow of information, etc.
  • Employee code of conduct,
  • Use of sensitive and/or privileged information, market abuse, professional confidentiality,
  • Compliance with clients’ interests,
  • Compliance with professional obligations applicable to the market and those specific to the management company.

3. Different situations of conflicts of interest:

Situations of conflict of interest which may be detrimental to a client may take varied forms, where Truffle Capital incurs or does not incur a financial loss and regardless of the intentional nature of the acts carried out or motives of the employees involved.

Five types of situation must be at least envisaged by Truffle Capital in order to assess whether a potential situation of conflict of interest is likely to arise:

  • The management company or an employee makes a financial gain or avoids a potential loss at the expense of the client,
  • The interest of the management company or an employee may be different from the interest of the client,
  • The management company or an employee performs the same professional activity as the client,
  • The management company or an employee is encouraged to favour one client as opposed to another (regardless of financial or other reasons),
  • The management company or an employee receives a financial benefit or a benefit in kind granted by a third party for the service carried out on behalf of the client.

4. Measures aimed at preventing conflicts of interest

Truffle Capital has implemented a strategy aiming at best preventing conflicts of interest which may arise in the performance of its various regulated activities. These measures are structured around four points:

– Compliance measures:

The Head of Compliance and Internal Audit is responsible for the control over the conflict of interest management policy, through legal and regulatory provisions, professional standards in addition to standards laid down by the management company. In second position is the Head of Operations and Risk Management, whose role involves supervising all risk and compliance aspects relating to the management company in the scope of providing the investment services.

– Training measures:

The management company informs employees and increases their awareness regarding the conflict of interest management policy implemented in the management company. In addition, each employee must pass the Financial Market Authority certification examination within six (6) months of joining the company, in order to become familiar with the code of conduct implemented in the management company, comply with resulting obligations (compulsory training courses, compulsory declarations to the Compliance Department of external activities and corporate offices, gifts and benefits received, personal transactions) and declare any situation placing him in a situation of conflict of interest.

– Conflict of interest identification measures:

The management company has carried out an inventory of actual or potential situations of internal conflicts, using a conflict of interest map identifying (i) types of situations generating conflicts, associated risks and (ii) related procedures to handle them.

– Incident monitoring measures:

The Head of Compliance and Internal Audit is empowered to manage all reporting on conflicts of interest. The Head of Compliance and Internal Audit may notify the General Management of the management company at any time and using any means regarding the occurrence of any incident. The Head of Compliance and Internal Audit may demand that action is taken to put an end to any incident. Therefore, employees who identify a situation which is analysed as constituting a situation of conflict of interest, are obliged to promptly notify the Head of Compliance and Internal Audit. The file relating to the generating events of the conflict of interest situation, the controls carried out, the Head of Compliance and Internal Audit’s recommendation and the decision taken are recorded on file. In addition, in accordance with Articles 13 to 15 of Directive 2006/73/EC, Truffle Capital will ensure that its external service providers apply, where applicable, equivalent rules to the conflict of interest management policy laid down in this document. Said rules must be stipulated in the agreement governing said service.

– Client information:

When the risk of causing harm to the client’s interest cannot be overcome in spite of the conflict of interest procedures and measures, which were implemented, Truffle Capital will inform the latter regarding the existence of a conflict of interest. However, before informing a client as a last resort, it is absolutely necessary to first attempt to take all preventative measures to resolve the conflict. Any information provided to the client must be laid down on a durable medium which is stored for at least five (5) years. It must also be sufficiently precise and detailed to enable the client to take an informed decision regarding the provision of the product or investment service offered.

5. Updating the conflict of interest management policy

Truffle Capital regularly updates its conflict of interest management policy in order to take into account, as appropriate:

  • Changes in laws and regulations;
  • Entry into force of new professional standards;
  • Any changes to the management company’s activities, organisation, processes and procedures.

Any additional information on this conflict of interest prevention and resolution policy may be obtained by the client by sending a request in writing to Truffle Capital.

Selection and assessment procedure of financial intermediaries

In accordance with Article L. 533-18 of the Monetary and Financial Code adapting Article 21 of Directive 2004/39/EC on markets in financial instruments (MiFID) and Articles 314-75 and 314-75-1 of the Financial Markets Authority’s General Regulations, TRUFFLE CAPITAL has drawn up and implemented a selection and assessment policy of entities which provide the services laid down in point 1.b of Article 314-79 of said Regulations, to act in accordance with the best interests of its clients. In the scope of this policy, TRUFFLE CAPITAL favours having diversified brokerage services rather than concentrating on one financial intermediary. In addition, TRUFFLE CAPITAL asks financial intermediaries to select being categorised as a “professional client” which imposes on them the “best endeavours” duty to our company.

The selection of financial intermediaries is based on the following criteria:

  • Research,
  • Order execution,
  • Back office.

All counterparts and intermediaries are assessed every six (6) months by applying the assessment criteria laid down above and are given a ranking which is a key element for brokerage allocation.

Client complaints and requests process

In the capacity as a portfolio management company, Truffle Capital is required to establish and keep in force effective and transparent procedures for reasonable and prompt handling of complaints received from clients (Article 313-8 of the Financial Markets Authority’s General Regulations).

In accordance with the regulations, any person wishing to make a complaint may contact the management company free of charge by writing to it at the following address: 5 Rue de la Baume, 75008 Paris, or by telephone on 01 82 28 46 00.

Truffle Capital will acknowledge receipt of the complaint to the sender within ten (10) days and subsequently record the complaint in the complaint monitoring file.

After analysis and handling, the management company will reply to the client within two (2) months with effect from receipt of the complaint.

In accordance with the regulations, Truffle Capital will also inform the client regarding the option to forward the complaint to the Mediator of the Financial Markets Authority whose contact details are as follows: 17 Place de la Bourse, 75082 Paris Cedex 02

 

 

 

 

 

First FinTech Closing
On the 15th of November 2017, Truffle has successfully completed the first closing of its institutional fund Truffle Financial Innovation Fund.
Premier closing FinTech
Le 15/11/2017, Truffle réalise le premier closing de son fonds institutionnel Truffle Financial Innovation Fund.
Premier closing FinTech
Le 15/11/2017, Truffle réalise le premier closing de son fonds institutionnel Truffle Financial Innovation Fund.