Conflicts of Interest Policy

Conflicts of Interest Policy

1. INTRODUCTION

1.1 IUX Markets ZA (Pty) Ltd (“the Company”, “we”, “us”, “our”) is an authorised Financial Services Provider (FSP No. 53103) regulated by the Financial Sector Conduct Authority (“FSCA”) in South Africa. Registered address: 18 Cavendish Road, Claremont, Cape Town, Western Cape, 7708.

1.2 The Company is required under the FAIS General Code of Conduct (“GCC”), and in particular section 3A, to adopt, implement and maintain a written Conflicts of Interest policy, to take all reasonable steps to detect, avoid, mitigate, manage and disclose any conflict of interest between the Company (or its Related Persons) and its clients, or between one client and another, and to act in the best interest of its clients at all times.

1.3 This Policy sets out the framework through which the Company identifies and manages such conflicts. A summary of this Policy is made available to clients and prospective clients on the Company’s website. This Policy must be read together with the Company’s Provider Due Diligence Policy, Treating Customers Fairly (TCF) Policy, Advertising and Marketing Policy, and the Personal Account Dealing sub-policy.

1.4 The Company affirms the following statutory position: the Company is legally obliged to disclose to clients and prospective clients, in writing and at the earliest reasonable opportunity, the existence of any actual or potential conflict of interest that may, or that a reasonable client would regard as likely to, influence the objective performance of the Company’s obligations. Nothing in this Policy, the Client Agreement, or any other client-facing document derogates from that duty.

1.5 Clients are asked to read this Policy, together with the Client Agreement and other legal documents available on the Company’s website, before entering into a business relationship with the Company.

2. SCOPE OF THE POLICY

2.1 This Policy applies to the Company’s directors, employees, representatives, key individuals, contractors, and any other persons directly or indirectly associated with the Company (collectively, “Related Persons”).

2.2 It governs all interactions between the Company and its clients, and between one client and another, in relation to the rendering of intermediary services.

2.3 The Company has established a number of internal policies, registers and arrangements (referenced in section 7) to help identify, avoid and manage conflicts.

3. FAIS ACT DEFINITIONS (STATUTORY ADDITIONS)

3.1 The following definitions, drawn from section 3A(1) of the GCC, apply in this Policy:

1. Associate: in relation to the Company, means (a) a subsidiary, holding company or fellow subsidiary; (b) any company or entity in which the Company or any of its Related Persons, individually or collectively, holds a significant financial interest (direct or indirect); (c) any director, shareholder, beneficial owner, trustee, member or partner of the Company; and (d) any entity that has the same meaning as in the FAIS Act and applicable subordinate legislation.
2. Conflict of Interest: any situation in which the Company or a Related Person has an actual or potential interest that may, in rendering a financial service to a client, (a) influence the objective performance of its obligations to the client; or (b) prevent the Company or the Related Person from rendering an unbiased and fair financial service to the client, or from acting in the interests of the client. This includes, without limitation, a financial interest, an ownership interest, or any relationship with a third party.
3. Distribution Channel: (a) any arrangement between a product supplier or any of its associates and one or more providers or their associates in terms of which any support or service is provided to the provider; and (b) any arrangement between two or more providers or their associates which facilitates, supports or enhances a relationship between the providers and a product supplier.
4. Financial Interest: any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, or any other incentive or valuable consideration, excluding an ownership interest, training (on products, legal, regulatory or industry matters) not extended to the value of travel or accommodation.
5. Immaterial Financial Interest: a financial interest that (a) has a determinable monetary value, the aggregate of which does not exceed R1,000 in a calendar year from the same third party, and (b) is received in the name of the Provider (not in the personal capacity of a Related Person).
6. Ownership Interest: any equity or proprietary interest for which fair value was paid by the owner, other than an equity or proprietary interest held as an approved or acknowledged nominee of a third party.
7. Third Party: (a) a product supplier; (b) another provider; (c) an associate of a product supplier or a provider; (d) a distribution channel; or (e) any person who, in terms of an agreement with any of the foregoing, provides a financial interest to a provider or its representatives.

4. INTERMEDIARY EXECUTION MODEL

4.1 The Company acts as a licensed FAIS intermediary in South Africa. All client CFD orders are routed to the Company’s affiliated principal CFD broker in Mauritius (the “Execution Broker”). The Company and the Execution Broker are members of the same corporate group.

4.2 The Company acknowledges that its corporate affiliation with the Execution Broker creates an inherent structural conflict of interest. The Company manages this conflict by (a) subjecting the Execution Broker to rigorous, arm’s-length due diligence (see the Provider Due Diligence Policy); (b) making disclosures about the affiliation, order routing and remuneration model to clients; and (c) maintaining governance controls that require the Company to act in the client’s best interest independently of any group-level commercial benefit.

5. IDENTIFICATION OF CONFLICTS OF INTEREST

5.1 For the purpose of identifying potential and actual conflicts, the Company considers, at a minimum, whether the Company or any Related Person:

1. is likely to make a financial gain, or avoid a financial loss, at the expense of the client;
2. 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 in that outcome;
3. has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client;
4. carries on the same business as the client;
5. 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 money, goods, services or any other financial interest, in excess of the standard commission or fee for that service;
6. holds an ownership interest or material relationship with a third party that may influence the rendering of financial services.

5.2 Examples of conflicts that may arise in the Company’s model include:

1. the Execution Broker hedging client-facing transactions before, during or after client execution, which may affect the price the client pays or receives. Any profit or loss resulting from such hedging is retained by the Execution Broker;
2. payments, commissions or non-monetary benefits passing between the Company, the Execution Broker, other associates, or third-party service providers, where permitted by applicable laws;
3. the execution of equal and opposite orders from different clients being internalised by the Execution Broker;
4. incentives linked to trading volumes that could encourage inappropriate or excessive client trading.

5.3 This Policy cannot exhaustively anticipate every conflict. The full list of identified conflicts is maintained in the Conflicts Register (see section 7.1).

6. MANAGING CONFLICTS OF INTEREST

6.1 Consistent with the FSCA’s regulatory position, the Company follows a hierarchy of controls: first, avoid the conflict where reasonably possible; second, mitigate or manage it through organisational and procedural controls; third, disclose the conflict clearly and in writing to the client to enable an informed decision; and, where those steps are inadequate, decline to act.

6.2 Specific management measures include:

1. information barriers restricting the exchange of information between Related Persons engaged in activities where the exchange may harm a client;
2. separate supervision of Related Persons acting for clients with potentially conflicting interests;
3. segregation of duties that, if combined in the same individual, would give rise to a conflict;
4. removal of any direct link between the remuneration of a Related Person performing one activity and the revenues generated by a different activity where a conflict may arise;
5. personal account dealing restrictions applicable to all Related Persons, governed by the Personal Account Dealing sub-policy;
6. pre-clearance of external business interests of directors, employees and representatives;
7. a need-to-know regime for confidential and inside information, with technical access controls;
8. a remuneration structure that does not compromise the Company’s duty to act in the client’s best interest;
9. periodic reviews of execution arrangements, order-routing quality and any group inter-company charges;
10. restrictions on the giving and receiving of gifts, inducements and hospitality, consistent with the R1,000 immaterial financial interest threshold and the Gifts and Inducements Register.

7. DISCLOSURE

7.1 The Compliance Department maintains the following registers and lists, as required by section 3A(2) of the GCC:

1. Conflicts Register: a record of all identified actual and potential conflicts, their classification, the controls applied, the disclosures made, the outcome, and the person responsible;
2. Gifts and Inducements Register: a record of the solicitation, offer, giving or receipt of any financial interest, together with the monetary value, the counterparty, the date, the recipient and the business rationale. Any interest exceeding R1,000 per third party per calendar year (or offered in the personal capacity of a Related Person) must be pre-cleared by Compliance.
3. List of Associates: a list of the Company’s Associates (including holding companies, subsidiaries and affiliates, such as the Execution Broker), updated on any change.
4. List of Third Parties with Ownership Interest: a list of any third parties in which the Company or any Related Person holds an ownership interest, and a list of any third parties that hold an ownership interest in the Company (in each case specifying the nature and extent of the interest).
5. List of Material Relationships: the names of any third parties in which the Company or any Related Person has a material relationship that might influence the rendering of financial services.
6. Personal Account Dealing Log: a record of declared personal trades by Related Persons, pre-clearance decisions and holding-period compliance.

7.2 The Company’s List of Associates, List of Third Parties with Ownership Interest, and List of Material Relationships are reproduced (or cross-referenced) in the client-facing summary of this Policy on the Company’s website, as required by section 3A(2)(c)(iv) of the GCC.

8. DISCLOSURE TO CLIENTS

8.1 Where a conflict of interest is identified, the Company will disclose the nature and extent of the conflict to the affected client in clear, fair, and not-misleading terms in writing, at the earliest reasonable opportunity and before rendering the financial service or, where the conflict arises subsequently, as soon as practicable after identification.

8.2 A disclosure does not relieve the Company of its overriding duty to act in the client’s best interest. Where disclosure is not sufficient, the Company will decline to act or withdraw from the transaction.

8.3 Disclosures are recorded in the Conflicts Register together with the date, channel, content and client acknowledgment (where applicable).

9. DIRECTORS’ PERSONAL FINANCIAL INTERESTS

9.1 Directors must comply with section 75 of the Companies Act 71 of 2008 in relation to personal financial interests in any matter to be considered by the Board. A declaration of interests is maintained and updated at least annually and before any material transaction.

10. TRAINING

10.1 All Related Persons receive initial training on this Policy at onboarding and at least annual refresher training thereafter, covering the hierarchy of controls, the registers, the immaterial financial interest threshold, personal account dealing rules, and the duty of disclosure. Completion of training is recorded in the Training Register.

11. MONITORING, COMPLIANCE OFFICER SIGN-OFF AND ANNUAL REVIEW

11.1 The Compliance Officer independently monitors adherence to this Policy, reviews the Conflicts Register and Gifts and Inducements Register, tests controls, and reports findings to the Key Individual and the Board at least quarterly.

11.2 The Compliance Officer records annual written confirmation that this Policy has been implemented and monitored in accordance with section 3A(2)(d) of the GCC.

11.3 This Policy must be reviewed and approved by the Board of Directors at least annually. The Board’s approval and any amendments are recorded in the Board minutes.

12. AMENDMENT

12.1 Material amendments to this Policy require executive approval and will be notified to clients proactively (on the website and, where appropriate, by direct communication) before taking effect. Non-material technical amendments may be approved by the Key Individual upon the Compliance Officer’s recommendation.

12.2 The Company will not rely on deemed acceptance through continued use of its services as the sole basis for binding clients to materially amended conflicts arrangements. Where an amendment materially affects a client’s rights or interests, the Company will obtain positive acknowledgment or, as appropriate, re-confirmation of the Client Agreement.