Montpensier Finance has established and maintains an effective conflicts of interest policy, under the European Directive on Markets in Financial Instruments (MiFID) which came into force on November 1st, 2007.

This policy aims to identify situations that constitute or may give rise to a conflict of interest entailing a risk of damage to the interests of one or more clients, and to define the procedures and measures to manage these conflicts within the framework of the following activities and services:

– Management activities:

• Management of UCITS as defined by UCITS Directive;
• Management of AIFs as defined by AIFM Directive;
• Portfolio management for third parties as defined by MiFID;

– Other activities or services (marketing of UCITS / AIFs managed by another manager, investment advice, discretionary management mandates for unit-linked insurance products).

As of August 2020, 75% of Montpensier Finance is controlled by its management and 25% by Amundi Asset Management. Montpensier Finance remains independent in its financial management. There is no interference from Amundi in the management of Montpensier Finance’s funds. Conflicts of interest that may arise from the structure and professional activities of other group members are therefore very limited (art. 321-48 RGAMF)

Process for the identification and detection of potential conflicts of interest:

Montpensier Finance undertakes all reasonable measures to enable the detection of potential conflicts of interests which may exist between either the company, the parties concerned and all other parties directly or indirectly liked to the company through a controlling relationship on the one hand, and its clients or UCIs on the other hand, or between two UCIs or two of the company’s clients.

In order to detect the types of conflicts of interests which may infringe upon the interests of a client, Montpensier Finance takes into account, as minimum criteria, although not limited to this criteria, the case of the investment management company or the person concerned by the conflict of interests:

• 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 the 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 or group of clients over the interest of the client to whom the service is being provided;
• carries on the same business as 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 any form whatsoever, other than the commissions or fees usually charged for such service.

Montpensier Finance has to identify all entities and persons that may be involved in a situation of potential conflict of interest, as well as identify areas of potential conflicts of interest.

Montpensier Finance conducted a mapping of potential conflicts of interest situations, which lists the situations likely to generate conflicts of interest in view of its size, its organization, the nature, importance and complexity of its business, and defines the outline of the procedures implemented by the company to prevent, supervise, and manage these conflicts of interest.

Risk mapping of conflicts of interest addresses the following themes:

•  The characteristics of Montpensier Finance’s structure and activities, which reduce the risk of potential conflicts of interest;
•  The independence of third-party management versus own-account management;
•  Supervision of own account transactions by employees and managers;
•  Supervision of investments of mandates and funds managed by Montpensier Finance in other funds managed by Montpensier Finance;
•  Requirements regarding the management by the same fund manager of funds and mandates;
•  Particular measures related to swing pricing / gates mechanisms;
•  Independence in the exercise of voting rights ;
•  Measures concerning possible incompatibilities between positions / mandates exercised outside Montpensier Finance
•  The handling of privileged information;
•  Measures related to the benefits received and to the remuneration of the employees and of the management company;
•  Measures related to the processing of orders (placing of orders, pre-allocation, partial executions…);
•  Special measures concerning the communication of information related to the composition of the assets of funds
•  Links with third parties: connections with service providers likely to give rise to potential conflict of interest.

Risk mapping of conflicts of interest is updated as often as necessary. Furthermore, a risk assessment of conflicts of interest is routinely undertaken during the creation and modification of products, activities and services.

Moreover, Montpensier Finance regularly updates a register of activities or services for which a conflict of interest entailing a risk of damage to the interests of one or more clients has arisen or is likely to arise.

Process to prevent potential conflicts of interest:

Montpensier Finance has always attached great importance and respect to the rules of ethics. Its staff is subject to regular training on the matter.

Montpensier Finance is committed to operate with discretion, loyalty, diligence and fairness, respecting the primacy of its clients’ interests in relation to its own interests or those of its staff. Particular attention will be paid to the prevention of conflicts of interest and, where applicable, their equitable resolution for the benefit of clients.

Montpensier Finance will seek to maintain equal treatment between clients, and between managed portfolios and unitholders of mutual fund shares.

Confidentiality lies at the heart of Montpensier Finance’s activity. The company pledges to set up and maintain an organization to prioritize the interests of its clients, including the implementation of Chinese walls where necessary.

Montpensier Finance also pledges not to use privileged information for either proprietary or third-party accounts.

Any asset manager’s objective should be the defense of his clients’ interests, while respecting management and risk control policies established by Montpensier Finance and, regarding portfolio management mandates, the type of mandate chosen by the client.

In order to ensure the integrity of Chinese walls, confidential information must not be shared with other Montpensier Finance staff members without valid business justification.

In any event, staff members must refrain from using privileged information they may have had knowledge of.

Staff members holding privileged information about a company must refrain from intervening in the securities concerned. Staff members must, as a rule, refrain from any market behaviour that could be construed as insider trading.

Montpensier Finance’s Code of Ethics also incorporates the principles relating to the prevention and management of conflicts of interest.

Procedures and measures to manage conflicts:

Montpensier Finance sets up a procedure for every case, in order to eliminate or control potential conflicts of interest.

These procedures are designed so that relevant persons engaged in the various activities involving a potential conflict of interest carry out these activities with an appropriate degree of independence regarding the size and activities of Montpensier Finance, and the magnitude of damage risks to clients. As a result, these procedures include the various measures used to prevent conflicts of interest.

Montpensier Finance has thus implemented procedures that ensure the autonomy of asset management and the independence of proprietary and third-party management, and supervise the selection of its service providers as well as personal transactions, order allocation and control of privileged information.

In the case of an unidentified conflict of interest, Montpensier Finance takes all appropriate measures to protect client interests. In this respect, staff members who detect a possible conflict of interest must immediately inform the RCCI, who decides whether the situation should be recorded as a potential conflict of interest in the risk-mapping database, if it isn’t already, and whether new controls should be set up.

Client information:

The conflicts of interest policy is available on Montpensier Finance website.

Moreover, should a conflict of interest deemed potentially harmful to a client arise, Montpensier shall inform said client in a durable medium without delay. Notification would then clearly indicate:

• that organisational and administrative procedures undertaken by Montpensier Finance to prevent or manage the conflict are insufficient to guarantee, with reasonable certitude, that the risk of an infringement upon the interests of the client will be avoided;
• a detailed description of the conflict of interests occurring in the context of the provision of investment services or auxiliary services, taking into account the type of client to whom the notification is addressed;
• the general nature and sources of the conflict of interests, as well as the risks incurred by the client resulting from the conflicts of interests and the measures implemented to mitigate these risks, in sufficient detail to enable the client to take an informed decision regarding the investment or auxiliary service in the context of the arising conflict of interests.