FSP NUMBER: 535111.1. This document embodies the Conflict-of-Interest Management Policy for MidSquare Capital.
1.2. “Conflict of interest” (“COI”) means any situation in which MidSquare Capital or its representatives 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 MidSquare Capital or its representatives 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 –
1.2.1. a financial interest;
1.2.2. an ownership interest;
1.2.3. any relationship with a third party (“third party” means (a) a product supplier, (b) another provider, (c) an associate of a product supplier or a provider, (d) a distribution channel, (e) any person who in terms of an agreement or arrangement with a person referred to in paragraph (a) to (d) above provides a financial interest to a provider or its representative).
1.3. The primary objectives of this Policy are –
1.3.1. To provide guidance on the behaviours expected in accordance with MidSquare Capital’s standards;
1.3.2. To promote transparency and to avoid business-related COI;
1.3.3. To ensure fairness in the interests of employees and MidSquare Capital.
1.3.4. To document the process for the identification, mitigation, disclosure, approval and review of activities that may amount to actual, potential or perceived COI;
1.3.5. To provide a mechanism for the objective review of personal outside interests.
1.4. MidSquare Capital is committed to ensuring that all business is conducted in accordance with good business practice. To this end MidSquare Capital conducts business in an ethical and equitable manner, and in a way that safeguards the interests of all stakeholders to minimize and manage all real or potential conflict of interest (COI). MidSquare Capital and its representative must therefore avoid (or mitigate where avoidance is not possible) any COI between MidSquare Capital and a client or its representative and a client.
2.1. MidSquare Capital or its representatives may only receive or offer financial interest from or to a third party as determined by the Commissioner of the Financial Sector Conduct Authority (“the Commissioner”) from time to time, and as set out in Annexure A hereto.
2.2. “Financial interest” means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic and foreign travel, hospitality, accommodation, sponsorship, other incentive, or valuable consideration, other than –
2.2.1. an ownership interest;
2.2.2. training, that is not exclusively available to a selected group of providers or representatives on products and legal matters relating to those products; general financial and industry information; specialized technological systems of a third party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training;
2.2.3. a qualifying enterprise development contribution to a qualifying beneficiary entity by a provider that is a measured entity.
2.3. Any immaterial financial interest received by a representative of MidSquare Capital must within 10 days of that receipt be recorded in the gift registry of MidSquare Capital, attached hereto as Annexure B.
2.4. MidSquare Capital may not offer any financial interest to its representatives–
2.4.1. That is determined with reference to the quantity of business secured for the provider without also giving due regard to the delivery of fair outcomes for clients; or
2.4.2. For giving preference to a specific product supplier, where a representative may recommend more than one product supplier to a client; or
2.4.3. For giving preference to a specific product of a product supplier, where a representative may recommend more than one product supplier to a client.
2.5 For purposes of paragraph 2.4, MidSquare Capital must be able to demonstrate that the determination of and entitlement to the financial interest takes into account measurable indicators relating to the –
2.5.1 Achievement of minimum service level standards in respect of clients;
2.5.2 Quality of the representative's compliance with this Act;
as agreed between MidSquare Capital and the representative, and that sufficient weight is attached to such indicators to materially mitigate the risk of the representative giving preference to the quantity of business secured for the provider over the fair treatment of clients.
3.1. Individual Identification – The primary responsibility for the identification of a COI rests with the representatives, employees, and directors of the FSP. Throughout the process of rendering financial services to a client a representative must ask the following questions:
3.1.1 Is there any situation that exists that influences the objective performance of my obligations to the client.
3.1.2 Is there any situation that exists that prevents or prohibits the unbiased and fair service to the client.
3.1.3 Is there any situation that exists that prevents or prohibits acting in the best interests of the client.
Where the answer to all three questions listed above is “no” then there is no actual conflict of interest associated with the financial service and the representative may proceed.
Where the answer to any of the three questions listed above is “yes” the representative must proceed to answer the following questions:
3.1.4 Was any conflict of interest caused by an actual or potential relationship with a third party?
3.1.5 Was any conflict of interest caused by an actual or potential financial or ownership interest?
Where the answer to any of these questions is “yes” then an actual or potential conflict of interest will have been identified.
4.1 Any identified actual or potential conflict of interests will be discussed with the key individuals and submitted to the board of directors for further investigation and determination of the appropriate course of action to resolve the conflict of interest.
4.2 In certain instances, resolving perceived conflict of interests will include withdrawing from the transaction in its entirety.
5.1. The following are potential COI that could affect MidSquare Capital –
5.1.1. Directorships or other employment.
5.1.2. interests in business enterprises or professional practices.
5.1.3. share ownership.
5.1.4. beneficial interests in trusts.
5.1.5. Personal Account Trading.
5.1.6. professional associations or relationships with other organizations.
5.1.7. personal associations with other groups or organizations, or family relationships.
5.1.8. Front running.
5.1.9. Rebates.
5.1.10. Kickbacks; and
5.1.11. Commission.
6.1. Upon identifying an actual or potential conflict of interest, and to determine whether the conflict of interest is avoidable the following procedure will be adhered to:
6.2. The Board of Directors of the company will meet and evaluate the actual or potential conflict of interest in an open and honest manner.
6.3. All information that let up to and resulted in, or caused the actual or potential conflict of interest will be disclosed to the board of directors and the appointed compliance officer of the company.
6.4. The Board of Directors shall apply their minds and determine by way of a majority vote whether the company is able to avoid the actual or potential conflict of interest.
6.5. During the evaluation process the Board of Directors, of the company will consider the following possible outcomes prior to finding in favour of unavoidability:
6.5.1 Possible negative impact it will have on the clients of the company, where the actual or potential conflict of interest is deemed to be unavoidable.
6.5.2 Possible negative impact it will have on the integrity of the financial services industry, where the actual or potential conflict of interest is deemed unavoidable.
6.6 Where the Board of Directors of the company, have determined that the actual or potential conflict of interest is in fact avoidable the following process is adhered to:
6.6.1 The Board of Directors will remove the underlying cause or situation that caused the actual or potential conflict of interest as soon as reasonably possible.
6.6.2 Any immediate negative impact or prejudice towards clients pending the removal of the actual or potential conflict of interest will be kept to a minimum.
6.6.3 The reasons why the actual or potential conflict of interest was unavoidable will be recorded and documented, for record- keeping purposes.
6.7 Measures implemented towards mitigating the actual or potential conflict of interest will include the following arrangements:
6.7.1 Continuous monitoring and assessment as to whether an identified actual or potential conflict of interest remains unavoidable.
6.7.2 Where a previously identified unavoidable actual or potential conflict of interest is subsequently deemed to be avoidable, measures will be implemented to ensure that such actual or potential conflict of interest is avoided, without delay.
6.7.3 All representatives shall be notified of any actual or potential conflict of interest as well as the reasons for their unavoidability.
6.7.4 All representatives are required to disclose to the client in writing that an actual or potential conflict of interest exists, when rendering financial services to the client.
6.8 The company and/ or the appointed compliance officer shall report on the status of the actual or potential conflict of interest in the company’s compliance report to be submitted to the Financial Sector Conduct Authority (“FSCA”).
7.1. At the earliest reasonable opportunity, MidSquare Capital and its representative must, in writing, disclose to a client any COI in respect of that client including –
7.1.1. Measures taken to avoid or mitigate the conflict.
7.1.2. Any ownership interest or financial interest that the provider or representative may be or become eligible for.
7.1.3. The nature of the relationship or arrangements with a third party that gives rise to a COI in sufficient detail to enable the client to understand the exact nature of the COI.
7.2. At the earliest reasonable opportunity, MidSquare and its representative must, in writing, inform a client of the Conflict-of-Interest Management Policy and how it may be accessed.
7.3. Notification of an actual or potential COI should be made to the person with responsibility for the issue or area in question, such as the relevant management team, supervisor, head of the department or key individual.
7.4. In accordance with an employee’s obligation to act in the best interest of his or her employer, it is not permissible for employees to engage in conduct that would amount to a COI with MidSquare Capital.
7.5. Staff that fail to disclose a potential or actual COI in accordance with this policy may be liable to disciplinary procedures as governed by relevant industrial awards or agreements.
8.1. Every staff member must have a copy of the Conflict-of-Interest Management Policy.
8.2. If a potential COI arises, the transaction must first be discussed with management before entering the transaction.
9.1. Non-compliance with this policy and the procedures described in it may amount to misconduct and employees may be subject to internal disciplinary action that may lead to dismissal.
10.1. MidSquare Capital has no affiliation or relationship with any associates.
11.1. There are third parties in which MidSquare Capital holds an ownership interest.
12.1. Faitree Capital owns a minority interest in the business.
The board of directors or other person or group of persons exercising the highest level of authority in the institution hereby approves this Conflict-of-Interest Policy and binds itself to create a culture of compliance within the institution.
Full name: …Reece Briesies……………………. Signature: … ………………….…………
Designation: …Director………………………………
Signed on this day of December 2024 in Cape Town
Full name: …Selwyn Pillay………. Signature: …… ….
Designation: …Director……………………….
Signed on this day of December 2024 in Cape Town
1.1. Those financial interests are reasonably commensurate with the service being rendered, taking into account the nature of the service being rendered and the resources, skills and competencies reasonably required to perform it;
1.2. The payment of those financial interests does not result in the provider or representative being remunerated more than once for the performance of a similar service;
1.3. Any actual or potential COIs between the interests of the client and the interests of the person receiving the financial interests are effectively mitigated; and
1.4. The payment of those financial interest does not impede the delivery of fair outcomes to the client.
2.1. Commission authorised under the Long-term Insurance Act or Short-term Insurance Act;
2.2. Commission authorised under the Medical Schemes Act;
2.3. Fees authorised under the Long-term Insurance Act, the Short-term Insurance Act or the Medical Schemes Act;
2.4. Fees for the rendering of a financial service in respect of which commission or fees referred to in paragraph (1.1), (1.2) or (1.3) is not paid, if
2.4.1. The amount, frequency, payment method and recipient of those fees and details of the services that are to be provided by the provider or its representative in exchange for the fees are specifically agreed to by a client in writing; and
2.4.2. those fees may be stopped at the discretion of that client.
2.5. Fees or remuneration for the rendering of a service to a third party.
2.6. Subject to any other law, an immaterial financial interest*; and
2.7. A financial interest, not referred to under sub-paragraph (2.1) to (2.6), for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid by that provider or representative at the time of receipt thereof.
2.8. For purposes of this document -
2.8.1. “immaterial financial interest” means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by –
2.8.1.1. a provider who is a sole proprietor; or
2.8.1.2. a representative for that representative’s direct benefit;
2.8.1.3. a provider, who for its benefit or that of some or all its representatives, aggregates the immaterial financial interest paid to its representatives.
Full name : … Selwyn Pillay……….……. Signature : ………….
Designation : ………Director……………………….………………….
Signed on this day of December 2024 in Cape Town
ANNEXURE B - GIFTS REGISTRY
NAME OF KEY INDIVIDUAL / REPRESENTATIVE
DATE ON WHICH GIFT WAS RECEIVED
SOURCE OF GIFT
TYPE OF GIFT
VALUE OF GIFT
