Cayenne sport PTY LTD conflict of interest management policy

CAYENNE SPORT PTY LTD CONFLICT OF INTEREST MANAGEMENT POLICY

INTRODUCTION

In terms of the Financial Advisory and Intermediary Services Act, 2002, Cayenne Sport is required to maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conflict of interest.

Our business comprises a network of motorcycle and passenger vehicle dealerships that retail new and used vehicles and motorcycles and provide after sales support representing various vehicle brands in South Africa.

PURPOSE:

The management of Cayenne Sport sees the company as a firm of expert practitioners operating in short term insurance as a professional advice-giving company. Therefore the company’s actions must be open to scrutiny by clients, potential clients and in some cases members of the public.

Consequently, there has to exist a duty of loyalty and fidelity by management and staff who have the responsibility of administering the company’s affairs honestly and prudently, and of exercising their best care, skill, and judgment for the sole benefit of clients. Those persons must exercise the utmost good faith in all transactions involved in their duties, and they must not use their positions within the company or knowledge gained there for their personal benefit. The interests of the company and its clients must be the first priority in all decisions and actions.

CONFLICT OF INTEREST DEFINED

The Financial Advisory and Intermediary Services Act, 2002 defines Conflict of Interest as:

“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, -

(a)  Influence the objective performance of his, her or its obligations to that client; or

(b)  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 –

(i)  a financial interest;

(ii)  an ownership interest;

(iii)  Any relationship with a third party”.

PERSONS CONCERNED:

For the purpose of this document, the term employee includes directors, managers and all permanent staff as well as contract staff who can influence the actions of others. For example, in addition to those of our staff that have direct dealings with clients and recommend products to them, this would include all who make purchasing decisions and anyone who has proprietary information concerning a client.

AREAS IN WHICH CONFLICTS MAY ARISE:

There has to exist a duty of loyalty and fidelity by management and staff of Cayenne Sport who have the responsibility of administering the company’s affairs honestly and prudently, and of exercising their best care, skill and judgment for the sole benefit of clients. Those persons must exercise the utmost good faith in all transactions involved in their duties and they must not use their positions within the company or knowledge gained there from for their personal benefit.

Conflicts of Interest in respect of all employees may arise from:

(a)  Management and staff that covertly compete with the business of Cayenne Sport for their own account. They will be in breach of their fiduciary duty.

(b)  Failure to disclose a financial interest in another company can also constitute a breach of management or staff’s obligation to act in good faith towards Cayenne Sport where management or staff stands to gain financially from dealings between Cayenne Sport and the company in which he or she has an interest.

(c)  Management and staff that enter into a second contract of employment if the other employer’s business interests are in conflict with those of the Cayenne Sport.

(d)  Management and staff that enter into an arrangement which entails a conflict between their own interest and those of Cayenne Sport.

The relations of employees with any third party and other companies as mentioned above, refers to any third party and company with which our company and/or our employees have an association, by shareholding or any other interest including:

·  Persons and firms supplying goods and services to the company,

·  Persons and firms from whom the company leases property and equipment;

·  Competing companies;

·  Agencies, organizations and associations including product suppliers and product providers with whom the company transacts business;

·  Family members, friends and other employees.

Conflict of interest may also arise in the method by which any of the staff are remunerated by product suppliers, particularly if they provide incentives to these staff for the quantity of business secured without appropriate quality assurance mechanisms in place specifically relating to financial services rendered.

The interests of the company and its clients must be the first priority in all decisions and actions. In other words, management and staff have to harness their energies and skills to furthering the business interests of Cayenne Sport.

RULES AND REGULATIONS - CONFLICTS OF INTEREST

In respect of Director, Manager or staff member of Cayenne Sport, possible conflicts include but are not limited to the following, and should be approved by management, and when approved, should be disclosed to clients as necessary:

·  any outside interest in any transactions to which Cayenne Sport is a party, if such an interest might in any way influence the performance of his duties for Cayenne Sport, unless the outside interest has prior written approval from the members of Cayenne Sport.

·  Seeking or accepting gifts, loans, shares, share offers or preferential treatment in respect of amenities or services from any party having business with Cayenne Sport.

·  Any interest, direct or indirect, in any competitor of Cayenne Sport.

·  use or disclose any information obtained from Cayenne Sport, which is not generally available to the public, for personal gain or for any reason other than that authorized by Cayenne Sport.

·  Act in contradiction to the agreement that is in place between Cayenne Sport and any staff member.

·  secure, source, canvass or promote any business or business activities for an external company, supplier or contractor on behalf of Cayenne Sport where such and employee stands to gain directly, indirectly as friends, family or in any other way which may be deemed to be personal or unethical.

·  Receive commission that is not authorized in terms of applicable legislations.

·  receive any financial interest for:

(i)  Giving preference to the quantity of business secured for the provider to the exclusion of quality service;

(ii)  Giving preference to a specific product supplier where more than one supplier can be recommended to a client;

(iii)  Giving preference to a specific product of a supplier where more than one product of that supplier can be recommended.

In terms of the above, incentives and rewards include cash or cash equivalents, vouchers, gifts, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, training, sponsorship, other incentive or valuable consideration except for incentives and rewards which could not be refused without discourtesy. In the case of transactions defined in the Financial Advisory and Intermediary Services Act, even if approved by management, such incentives and rewards must not exceed R1000 in any one calendar year from any one person or company.

ASSOCIATE COMPANIES AND/OR RELATIONSHIPS

Traficc (Pty) Ltd – This Company provides claims administration services.

Seriti Solutions – This Company provides an IT platform for representatives reporting.

(Built to Last) – Cell captive/fund arrangements and dividend shares

IUM – It is a company that handles leads supplied by when a need for comprehensive insurance is determined

TRANSACTIONS WITH ASSOCIATED COMPANIES

Transactions with parties with whom a potential or actual conflict of interest exists may be undertaken only if all of the following are observed:

1. The conflict of interest has been identified and attempts to avoid it have not been successful;

2. The conflict of interest has been mitigated as far as possible;

3. The conflict of interest is fully disclosed to clients where appropriate;

4. An employee with the conflict of interest is excluded from the discussion and approval of such transaction is provided by the members;

5. A competitive quotation, bid or comparable valuation exists and has been properly evaluated and where involving a client has been properly explained;

6. The members have determined that the transaction is in the best interest of the company and its clients.

If there is any doubt, reference should be made to the MD who shall determine whether a conflict exists and in the case of an existing conflict, whether the contemplated transaction may be authorized as just, fair, and reasonable.

CONFLICT OF INTEREST EMPLOYEE ACCEPTANCE

Every employee is requested to sign a statement of acceptance whereby every supplier or outside third party, whether an associate of our company or otherwise that offers to provide any incentive of whatsoever nature to any of our employees or associate companies, is to be immediately reported to the members.

Incentives include cash or cash equivalent, vouchers, gifts, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, training, sponsorship, other incentive or valuable consideration except for incentives the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year.

The statement also requires employees to provide information with respect to businesses and/or parties with whom P transact with that are related to them, including:

1.  a spouse, domestic partner, child, mother, father, brother or sister;

2.  any corporation or organization of which the employee is a board member, an officer, a partner, participates in management or is employed by, or is, directly or indirectly, a debt holder or the beneficial owner of any class of equity securities; and

3.  Any trust or other estate in which an employee has a substantial beneficial interest or as to which an employee serves as a trustee or in a similar capacity.

This statement is deemed included in every employee’s service contract.

CONFLICT OF INTEREST SUMMARY (Possible conflicts of interest identified)	Measures for avoiding the conflict	Mitigating the conflicts of interest	Measures for disclosure	Internal controls	Consequences of Non-compliance
Employees receiving gifts, vouchers, holidays or any other ‘handout’ from suppliers	All prohibited except gifts of less than R200	None necessary	None necessary	Ongoing declaration of honesty by employee	Disciplinary action.
Employees being employed by another company	Only allowed if not competing with our company or a client	None necessary	None Necessary	Must obtain permission from line manager and recorded on personnel file	Disciplinary action.
Receiving remuneration for services other than from our company	Only allowed if not competing with our company or a client	None necessary	None Necessary	Must obtain permission from line manager and recorded on personnel file	Disciplinary action.
Being invited by a supplier to lunches/dinners/shows and other entertainment events	Allowed depending on value of event	None necessary	Disclosed to client during any discussion involving that supplier	Permission to be obtained from line manager	Disciplinary action.
Any activity involving clients by which family and friends of an employee can financially benefit.	Prohibited unless agreed to by line manager (only in special circumstances)	Excluding the employee from discussions with clients	Disclosed to client during any discussion involving that supplier	Employees must provide ongoing disclosure as to which family members or friends could be involved and why	Disciplinary action
Our company has a share in a cell captive company called Built to Last	We will sell these products if it is the best value for money for the customer	Claims are handled by underwriter, but if declined we have the right to submit an ex gratia claim	We disclose our arrangement in writing at the point of sale	We ask our compliance officer to carry out random checking and include findings in the quarterly report	Possible FAIS complaint and penalties
Our company only has agency contracts with selected insurers	We make sure that the agencies we have are representative of the entire insurance industry	We do annual surveys of insurers to ensure that we have a full armory of products and services on offer	We provide a copy of our list of selected insurers to all our clients at the time of review	The line managers do ‘spot checks’ to ensure that this is provided.	Disciplinary action where appropriate
Where we place business brokers, we earn a fee for submitting the lead	All reputable insurers are listed on the platform and get an opportunity to contact the client	No measures taken	We disclose our earnings at the point of sale	We ask our compliance officer to carry out random checking and include findings in the quarterly report	Disciplinary action where appropriate

DISCIPLINE

Should any Director, Manager or employee of Cayenne Sport be found to deviate from this policy in any way, Cayenne Sport reserves the right to take the appropriate disciplinary measures against such a Director, Manager or staff member.

Should any Director, Manager or employee be found deviating from this policy in any way, Cayenne Sport reserves the right to immediately remove the entity from the Cayenne Sport license as well as to advise the Financial Services Board of this matter.