- Client Agreement
- Conditions and disclaimers that govern the use of the entire website
- Conditions and disclaimers that govern Research contained in the Research pages of this website
- The policy for dealing with any possible conflicts of interest in relation to Research
- A table setting out the tariff for recommendations used in Research.
- A table showing the distribution of headline recommendations in respect of Research published during the last quarter.
- List of Group subsidiaries of Numis Corporation Plc
- Pillar 3 Disclosures 2009
- Pillar 3 Disclosures 2010
- Anti Bribery and Corruption Policy Statement
- Pillar 3 Disclosures 2011
- Pillar 3 Disclosures 2012
The policy for dealing with any possible conflicts of interest in relation to Research - 19 October 2010
While Numis is an investment bank providing research and trading/sales, corporate broking and corporate finance services. Through its activities potential and actual conflicts of interest will arise. If these conflicts of interest are not identified and managed, this could lead to reputational damage to Numis, and/or legal or regulatory action against Numis and its employees.
As an international organisation, there are various rules and regulations to which Numis is subject and that relate to the management of conflicts of interest.
This policy sets out in summary how Numis will identify and manage potential conflicts of interest.
This policy applies to all Numis employees in Numis Corporation Plc, Numis Securities Ltd and Numis Securities Inc including:
• employees of Numis;
• contractors located at the premises of Numis (and under the control of Numis); and
• anyone engaged by Numis (interns and long-term temporary employees).
The responsibility for the identification of conflicts of interest rests with all employees. Senior Management is ultimately responsible for the implementation of appropriate procedures to ensure potential conflicts are identified and managed. Each employee must be aware of the extent and nature of the risk that their activities or business area poses in terms of conflicts of interest and should be fully familiar with the processes that should be followed in the event of a potential conflict arising.
As an integral part of the escalation process, issues identified relating to conflicts should be escalated to the Compliance Department in order that these can be properly addressed.
4. DEFINITION OF CONFLICTS OF INTEREST
Conflicts of interest may arise, in relation to the investment services provided by Numis, generally in the following circumstances where:
i. the interests of Numis conflict with those of a Client or cause a conflict between a Client and its employees;
ii. the interests of one Client of Numis conflicts with those of another Numis Client;
iii. the interests of any employees may conflict with the interest of a Client;
iv. the interests of any employees may conflict with the interest of Numis, its subsidiaries or a service provider.
- Numis (or an employee) is likely to make a financial gain, or avoid a financial loss, at the expense of the Client; or other party;
- Numis (or an employee) has an interest in the outcome of a service provided to the Client, or of a transaction carried out on behalf of the Client, which is distinct from the Client’s interest;
- Numis (or an employee) has a financial or other incentive to favour the interest of another party over the interests of the Client;
- Numis (or an employee) carries on the same business as the Client or is connected to, or with, the Client; or
- Numis (or an employee) receives, or will receive from a person other than the Client, an inducement in relation to a service provided to the Client, in the form of monies, goods or services, other than the standard commission or fee for that service.
The requirement to manage conflicts of interest may be set out in law and regulation. It is important to be aware of the relevant local laws and regulations and also to be familiar with the laws and regulations operating in the country where your Client is located.
It may be necessary to disclose to the Client the nature of a particular conflict which has been identified by Numis. Certain relevant facts may need to be disclosed to the Client in order to allow them to make an informed decision about the impact of the conflict. In certain jurisdictions, conflicts of interest may not be able to be managed simply by disclosure. It is important that you discuss any such matter with your manager and the Compliance Department as soon as you become aware of a potential conflict.
European legislation requires EU regulated firms to take all reasonable steps to identify and manage conflicts of interest. In the USA, there is a variety of legislation, regulation and precedent which requires the avoidance and/or appropriate management of conflicts.
Therefore, whenever providing a service to a Client in the European Union, USA or other location Numis must be sensitive to these issues and not create a situation that may create a conflict of interest.
6. RESTRICTED, INSIDE AND CONFIDENTIAL INFORMATION
Restricted information is information relating to a Client, a potential Client or publicly traded securities or other investment instruments, which is not in the public domain. The information is usually derived from Clients but could also be obtained from third parties, such as lawyers, accountants, banks, etc. Access to, and the flow of, restricted information must be limited and controlled to those who need to know. This is to prevent, as far as possible, conflicts of interest arising or the misuse of that information. Restricted information includes inside information and confidential information. Therefore, “Chinese walls” may need to be used to restrict the flow of information to preserve confidentiality of Client information. A “Chinese wall” is not just a physical or technical barrier to prevent the flow of information, but rather a state of mind or standard of behaviour to protect Client information, including the identity of a Client and their transactions.
The definition of insider information can vary from one regulator to another. As Numis operates in the UK, USA and deals with Clients in multiple jurisdictions, it is important to consider insider information in the widest sense. Broadly, it is considered to be information, which:
- is of a precise nature;
- involves a publicly traded security or a related investment or the issuers of investments (in most cases);
- is not publicly available; and
- would, if publicly available, be likely to have a significant effect on the price of those investments or the price of related investments.
Information, in the context of insider trading, may also include:
- information concerning the business, affairs or prospects of a company;
- Client order flow information;
- the activities of a Clients Directors e.g. selling their shares;
- details on the deliverable supply of a company’s raw materials or final output; and
- official statistics, fiscal and monetary policy information not yet publicly released.
The Numis Market Conduct policy provides further guidance in this area. If in doubt, the Compliance Departments will assist you.
Confidential information is taken to encompass Client and Numis related information. In addition it encompasses personal data and sensitive personal data relating to Clients, staff and third parties. A specific section related to personal data (data protection) is set out in the Numis Data Protection Policy, which can be found on the Intranet.
Confidential information is likely to be confidential if the owner of the information reasonably:
a) considers that the release of the information would be damaging to it or advantageous to its competitors or others; and
b) believes that the information is not already in the public domain.
Confidential information may not necessarily affect the price of security and may not necessarily be inside information. Numis has a duty to ensure that confidential information is not passed outside of Numis or made available internally to other departments or desks, which do not need to know the information.
7. MARKET ABUSE
The activities that may constitute market abuse, such as insider trading and/or front running, will create for instance a conflict of interest between Numis and the Client by creating a more favourable position for Numis to the Client’s detriment. See the Market Practices section of the Manual for further information.
8. IDENTIFICATION OF CONFLICTS
Examples of situations where conflicts of interest may arise within Numis are as follows:
Facilitation/Proprietary Trading Book
- activity on the dedicated proprietary trading book;
- working an order taken “on-risk” for a Client;
- an error may arise while brokering on behalf of a Client requiring Numis to trade out of the position as part of our error management process;
- a Client may default on their financial obligations to Numis resulting in the firm having to trade out of that position as part of a risk management process;
- certain desks are permitted to hold small positions to facilitate Client orders, for example warehousing trades in illiquid stocks;
- Numis may hedge its exposure in relation to its overall positions arising from the market making / investment trust activities;
- Numis may acquire, and/or dispose of, investments in the shares or units of corporate finance Clients. Numis may, in the ordinary course of business with that Client, receive information that may not be available to other investors in
the shares or units. Consequently, Numis may find itself in a potentially favoured position compared to other investors;
- Research, marketing material, market commentary and detailed sales notes may be issued by various desks, as a value-added service to the brokerage and investment banking service provided. The marketing material and sales notes may contain recommendations/views in relation to investment activity. Conflicts may arise in relation to Numis’ brokering activities and the production of this material;
- Numis may entertain Clients and, on certain occasions, purchase gifts for Clients. These activities are subject to Numis’ Gifts and Entertainment Policy; and
- on occasion, Numis may share commission/fees that it charges its Client with an Introducing Broker or other party. This is subject to a legal agreement and notification is also made to the Client.
Numis Corporation Plc may also engage in activities that may lead to potential conflicts of interest. Primarily these conflicts are likely to arise from investments held in Client shares and units. It is therefore a requirement that an appropriate Chinese Wall is operated where NSL and/or NSI staff hold transactional related information of a price sensitive nature (inside information), that may impact upon investment decision.
Personal Account Dealing
Employees are not permitted to engage in certain activities in order to avoid actual or potential conflicts of interest. Numis has a personal account dealing policy which sets out the limited circumstances in which you may engage in personal account trading and the procedures for obtaining permission.
Senior Management and the Head of HR are responsible for setting, assessing and monitoring remuneration to ensure that any potential conflicts are addressed. The remuneration is assessed and set taking into account the regulatory requirements and risk profiles of the activities of the firm.
External Business Interests
It is recognised that employees having outside business interests may cause perceived and/or actual conflicts of interest to Numis and its Clients. Staff are required to notify and obtain pre-approval from the Compliance and HR Departments before accepting or participating in outside business interests and employment.
9. MANAGEMENT OF CONFLICTS
Numis has a number of policies in place, designed to set out standards of behaviour in certain circumstances, with which you should comply. Key elements of these are contained in the Numis Principles. All business dealings within Numis are defined and governed by these Numis Principles, which set the standards of behaviour that apply to each member of the staff and to each Numis entity.
Appropriate control and management of conflicts is a necessary and ongoing concern of the firm. Numis addresses this concern, through its policies and procedures, along with a proactive approach to identifying and managing such potential conflicts. This approach is to the benefit of Clients, Numis, its staff and its shareholders.
Any questions or concerns as to whether an activity will result in a potential conflict of interest should be referred to Compliance