Conflict of Interest Policy

Background

The Company offers products and services including execution only and discretionary managed portfolio management services, custody and administration I terms of the JSE Equities rules.

The Company offers products and services to a broad and diverse client range and from time to time, it will inevitably find itself in a position where the interests of one part of the business may conflict with the interests of another part of the business. These will include conflicts arising between interests of a Group company, Employees, clients and between clients themselves. We are required to manage these types of conflicts to ensure all our clients are treated fairly.

References to “the Group” in this document should be taken to mean NVest Financial Holdings Group (Pty) Limited along with all relevant subsidiary and affiliate companies either collectively or individually as the context may require.

Scope

Purpose of a conflict of interest management policy

In terms of Section 3(b), a provider and a Representative must avoid, and where this is not possible, mitigate any conflict of interest between the provider and a client, or a Representative of the provider and his, her or its clients.

The purpose of the policy is to:

Demonstrate internal controls and mechanisms for the identification of conflicts of interest.

Establish measures for the avoidance of conflicts of interest, and where avoidance is not possible, the reasons, therefore.

Establish the measures for the mitigation of such conflicts of interest.

Establish measures for the disclosure of conflicts of interest.

Establish processes, procedures and internal controls to facilitate compliance with the policy.

Convey consequences of non-compliance with the policy.

Definitions

Conflict of Interest

Conflict of Interest means 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:

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

Prevent a provider or Representative from rendering an unbiased and fair financial service to that client, or from acting in the interest of that client, including but not limited to:

A financial interest;

An ownership interest;

Any relationship with a third party

Financial Interest

Financial Interest means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than:

An ownership interest;

Training, that is not exclusively available to a selected group of providers or Representative s, on:

Products and legal matters relating to those products;

General financial and industry information;

Specialised technological systems of a third party necessary for the rendering of a financial service, but excluding travel and accommodation associated with that training.

A recognised qualifying enterprise development contribution to a qualifying beneficiary by a provider that is a measured entity.

Immaterial Financial Interest

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:

A provider who is a sole proprietor; or

A Representative for that Representative ’s direct benefit;

A provider, who for its benefit or that of some or all of its Representative s, aggregates the immaterial financial interest paid to its Representative s.

Ownership Interest

Ownership Interest means

Any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than equity or a proprietary interest held as an approved nominee on behalf of another person, and

Includes any dividend, profit share or similar benefit derived from that equity or ownership interest.

Third Party

Third Party means

A product supplier;

Another provider;

An associate of a product supplier or a provider;

A distribution channel;

Any person who in terms of an agreement or arrangement with a person referred to above provides a financial interest to a provider or its Representative s.

Associate

Associate means

In relation to a natural person:
A person who is recognised in law or the tenets of religion as the spouse, life partner, or civil

Union partner of that person;

A child of that person, including a stepchild, adopted child and a child born out of wedlock;

A parent or stepparent of that person;

A person in respect of which that person is recognised in law or appointed by a Court as the

Person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person;

A person who is a spouse, life partner or civil union partner of a person referred to above;

A person who is in a commercial partnership with that person.

In relation to a juristic person:

Which is a company, means any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary; (applicable to NVest)

Which is a close corporation registered under the Close Corporations Act, means any member thereof as defined in section1 of that Act;

Which is not a company or a closed corporation, means another juristic person which would have been a subsidiary or holding company of the first-mentioned juristic person:

Had such first-mentioned juristic person been a company, or

In the case where that other person, too, is not a company, had both the first-mentioned juristic person and that other person been a company;

Means any person in accordance with whose directions or instructions the board of director of or, in the case where such juristic person is not a company, the Board of such juristic person is accustomed to act.

In relation to any person:

Means any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which the Board is
accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph;

Includes any trust controlled or administered by that person.

Distribution Channel

Distribution Channel means:

Any arrangement between a product supplier or any of its associates and one or more providers or any of its associates in terms of which arrangement any support or service is provided to the provider or providers in rendering a financial service to a client;

Any arrangement between two or more providers or any of their associates, which arrangement facilitates, supports or enhances a relationship between the provider or providers and a product supplier;

Any arrangement between two or more product suppliers or any of their associates, which arrangement facilitates, supports or enhances a relationship between a provider or providers and a product supplier.

Chinese Walls

Chinese Walls means internal organisational arrangements which act as information barriers controlling the disclosure of information within an organisation and preventing the unauthorised release of Restricted Information to other areas of the Group.

Confidential Information

This section adheres to the Group’s POPI Policy which sets out the minimum standards regarding accessing and ‘processing’ of any personal information belonging to another. Processing involves the collecting, receiving, recording, organizing, retrieving, or the use, distribution or sharing of any such information.

Confidential information means any information received by NVest from a client, prospective clients or other third parties which has a ‘’quality of confidence”.

Essentially, for it to be deemed confidential the information will:

Not be in the public domain; and

Be judged to be sufficiently sensitive so that its release or disclosure is likely to cause its owner to suffer a disadvantage or loss.

NVest must always treat information received from clients to whom it owes fiduciary duties as confidential. Common examples of Confidential Information include information:

Released to NVest for a specific purpose (such as to allow the company to evaluate a transaction) and which cannot be used for any other purpose without the client’s express agreement. Such information should generally be treated as Confidential Information whether or not there is a formal confidentiality agreement in place or NVest has been formally engaged by the client;

Which might be subject to confidentiality laws which provide that NVest cannot pass or disclose the information without the client’s consent;

Relating to a client’s plans for capital raising even where these are not material or are unlikely to effect the price of any publicly traded securities or instruments issued by that company;

Relating to the business structure or financing of a company which, while not insignificant, are unlikely to affect the price of any publicly traded securities or other instruments relating to that company. This might be the case for nonmaterial transactions (such as the sale of a small, non-core subsidiary) or other transactions where the market is already aware that it will take place; and

Obtained about a company as part of due diligence carried out to support a transaction for that company even where this is deemed unlikely to affect the price of the company’s securities.

Inside Information

Inside information means information that;

is precise;

is not generally available or within the public domain;

relates directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments; and

would, if made public, be likely to have a significant effect on the price of those financial instruments or on the price of related derivative financial instruments.

Precise means information that indicates circumstances that exist or may reasonably be expected to come into existence or an event that has occurred or may reasonably be expected to occur and is specific enough to enable a conclusion to be drawn as to the possible effect of those circumstances or event on the price of financial instruments or related financial instruments. The test for whether a particular piece of information is to have a significant effect on the prices of financial instruments is if, and only if, it is information of a type which a reasonable investor would be likely to use as part of the basis of his investment decisions.

Inside Information include, but are not necessarily limited to, information relating to:

the current or future financial or operating performance of a company whose securities are publicly traded on an exchange or in the over the counter (OTC) markets, where the release of such information is likely to affect the price of those securities;

any financial restructuring activity such as capital raising or a share buy-back which is likely to impact the price of existing securities relating to the issuer;

the Company’s unpublished research recommendations and price targets, and changes in these likely to impact the securities to which they refer. This would include credit ratings issued by rating agencies, or Investment Research issued by a securities Company;

official statistics and announcements relating to fiscal and monetary policy before they are publicly released;

the conduct of takeovers bids, disposals and acquisitions etc.

Employee(s)

Employee (s) means any individual employed by and holding a valid contract of employment with NVest including directors, contractors and agents as well as Key Individual(s) and Representatives.

Key Individual(s)

Key Individual(s) means individual responsible for managing and overseeing the activities relating to the rendering of any financial service. KIs have an enormous responsibility to ensure that they carry out their duties with the necessary due care, skill and diligence. The activity of “managing” means to have executive control or authority and “overseeing” is the function of supervising a person/s and their work in an official capacity.

Representative (s)

Representative means any person, including a person employed or mandated by such first-mentioned person, who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandate, but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity, which service –

does not require judgment on the part of the latter person; or

does not lead a client to any specific transaction in respect of a financial product in response to general enquiries.

Identifying a conflict of interest

Individual Identification

Throughout the process of rendering a financial service to a client, an Employee must apply his or her mind to answering the following questions:

is there any situation that exists that influences the objective performance of my obligations to a client?

is there any situation that exists that prevents me from rendering an unbiased and fair financial service to a client?

is there any situation that exists that prevents me from acting in the best interest of a client?

If the answer to all three questions is “no”, then there is no conflict of interest
associated with the financial service and the Employee may proceed.

If the answer to any one of the three questions is “yes”, the Employee must proceed to answer the following additional questions:

is the situation caused as a result of an actual or potential relationship
with a third party? (see definition of “third party”)

Is the situation caused by an actual or potential financial or ownership
interest? (see definition of ‘financial interest’ and ‘ownership interest”)

If the answer to any one of these questions is “yes”, an actual or potential
conflict of interest will have been identified.

Further Guidance On Identifying A Conflict Of Interest

The definition of a Conflict of Interest incorporates the following terminology:

…….…..influences the “objective performance” of his, her or its
obligations to that client…

…………prevents a provider or Representative from rendering an
“unbiased and fair financial service” to that client…..

including but not limited to a “financial interest”.

It is generally understood that the word “objective” refers to a situation where an individual’s personal feelings or opinions are completely removed from the equation. The “objective performance” of NVest or its Employees’ obligations therefore implies a situation where financial services are rendered without any untoward influences.

The word “bias” or “biased” is understood to mean a form of prejudice towards a particular person or viewpoint, whereas the word “fair” or “fairness” indicates a situation of just circumstances or being treated on an equal footing. An unbiased financial service therefore implies a financial service that does not lend itself to a particular persuasion, where no reasonable justification for such persuasion can be found. Similarly, a fair financial service implies a situation where the same conclusion or outcome will consistently present itself given the exact same set of circumstances.

Subject to section 3A(1)(a) of the FAIS General Code of Conduct, NVest and its Representatives may only receive or offer the following “financial interest” from or to a “third party”:

commission and *fees authorised under the Long-term Insurance Act;

*fees for the rendering of a financial service in respect of which commission or fees referred to above is not paid, if:

a) the amount, frequency, payment method and recipient of those fees and details of the services that are to be provided by the provider in exchange for the fees are specifically agreed to by a client in writing; and

b) those fees may be stopped at the discretion of that client;

c) *fees or remuneration for the rendering of a service to a third party;

(*NVest or its Employees may only receive or offer these financial interests if –

those financial interests are reasonably commensurate with the service being rendered, taking into account the nature of the service and the resources, skills and competencies reasonably required to perform it;

the payment of those financial interests does not result in NVest or its Employees being remunerated more than once for performing a similar service;

any actual or potential conflicts between the interests of clients and the interests of the person receiving the financial interests are effectively mitigated;

the payment of those financial interests does not impede the delivery of fair outcomes to clients.);

an immaterial financial interest (subject to any other law);

a financial interest, not referred to above for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid by NVest or its Employees at the time of receipt thereof.

NVest may not offer any financial interest to its Employees:

that is determined with reference to the quantity of business secured for NVest without also giving due regard to the delivery of fair outcomes for clients; or

for giving preference to a specific product supplier, where an Employee may recommend more than one product supplier to a client; or

for giving preference to a specific product of a product supplier, where an Employee may recommend more than one product of that product supplier to a client.

NVest must be able to demonstrate that the determination and entitlement to the financial interest, that may not be offered to Employees as determined by quantity of business secured without also giving due regard to the delivery of fair outcomes for clients, takes into account measurable indicators relating to the-

achievement of minimum service level standards in respect of clients;

delivery of fair outcomes for clients;

quality of the Representative ’s compliance with this policy;

as agreed between NVest and the Employee, 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.

Internal Controls To Identify Conflicts Of Interest

NVest has implemented the following internal controls to identify actual or potential conflicts of interest that may arise:

NVest’s Board of directors is required to, at each board meeting, confirm that directors are satisfied that all contracts held with third parties do not in any way influence NVest’s:

objective performance towards its clients;

ability to render fair and unbiased financial services towards its clients;

ability to act in the best interest of the client.

NVest’s Board of directors is required to, at each board meeting, confirm that directors are satisfied that no ownership interest exists between NVest and any third party that, in any way, influences NVest’s:

objective performance towards its clients;

ability to render fair and unbiased financial services towards its clients;

Conflict of Interest declarations are signed by all relevant personnel (Employees) on a quarterly basis. The purpose of collecting Conflict of

Interest declarations is to assist NVest and the appointed Compliance Officer to identify actual or potential conflicts of interest.

A list of NVest’s associates is attached as an annexure hereto. The list is reviewed on an annual basis.

A list of all third parties in which NVest holds an ownership interest is attached as an annexure hereto. The list is reviewed on an annual basis;

A list of all third parties that holds an ownership interest in NVest is attached as an annexure hereto. The list is reviewed on an annual basis.

NVest maintains a Gift Register in terms of NVFH Group Ethics Policy. All gifts received from a third party with an estimated value of R50 or more must be reported to NVFH Group Compliance where it is recorded in a Group Gift Register.

All relevant personnel are required to immediately disclose in writing to NVest’s Board and NVFH Group Compliance, any actual or potential conflict of interest as soon as they become aware of such situation.

Possible conflicts of interest would include, inter alia –

Personal Account Trading Where Employees have the potential to make personal profit from inside information or other information that they became aware of in their professional capacity e.g. where an Employee of the Company executes a personal account trade ahead of a client order, or if they were to be incentivized so as to engage with a client with a view to achieving an outcome advantageous to themselves rather than in the client’s best interest creating a potential conflict of interest.

Proprietary Trading , Although Proprietary Trading will be limited within NVest, there does exist the potential for proprietary trading to lead to conflicts of interests with clients which need to be effectively controlled and managed. For example, a conflict may arise where traders buy the same shares that NVest clients are buying in order to profit from the price increase that the customers’ buys might create. This practice is known as “front running” and can be to the detriment of NVest clients. A conflict may also arise if NVest traders have bought securities that have been performing badly and then in an effort to get rid of them, sell the same securities to clients.

Gifts and Inducements will on occasion give or receive gifts and/or to or from clients and this may potentially create conflicts of interest as Employees could be induced to favour certain clients over others.

Avoiding and mitigating a conflict of interest

NVest’s Board and relevant Key Individuals will convene and evaluate the actual or potential conflict of interest in an open and honest manner;

All information that’s led up to and resulting in, or causing the actual or
potential conflict of interest will be disclosed to NVFH Group Compliance;

NVest’s Board and Key Individuals will apply its mind and determine by way of majority vote whether NVest is in a position to avoid the actual or potential conflict of interest;
During the evaluation process, NVest’s Board and relevant Key Individuals will consider the following possible outcomes prior to a finding in favor of unavoidability:

The possible negative impact it will have on NVest clients where the actual or potential conflict of interest is deemed to be unavoidable;

The possible negative impact it will have on the integrity of the financial services industry where the actual or potential conflict of interest is deemed to be unavoidable;

Where NVest’s Board and relevant Key Individuals has determined that the actual or potential conflict of interest is in fact avoidable, the following processes will be followed:

NVest’s Board will remove the underlying cause or situation that results in the actual or potential conflict of interest as soon as reasonably possible;

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;

The reasons why the actual or potential conflict of interest was determined to be avoidable will be recorded in NVest’s Compliance Manual;

Similar circumstances that has led up to the actual or potential conflict of interest will be avoided in the future.

Where NVest’s Board and relevant Key Individuals has determined that the actual or potential conflict of interest is unavoidable, the following processes will be followed:

NVest’s Board will convene and determine the measures that will be implemented in order to mitigate the actual or potential conflict of interest as far as reasonably possible;

The reasons why the actual or potential conflict of interest was considered to be unavoidable will be recorded in NVest’s Compliance Manual.

Any measures implemented towards mitigating the actual or potential conflict of interest will include the following arrangements:

The status of whether the actual or potential conflict of interest is still deemed to be unavoidable shall be reassessed on a continuous basis;

Where a previously deemed unavoidable actual or potential conflict of interest is subsequently deemed to be avoidable, such actual or potential conflict of interest shall immediately be avoided;

All Employees will be notified of any actual or potential conflict of interest as well as the reasons for its unavoidability;

When rendering a financial service, an Employee shall be required to disclose to the client in writing that an actual or potential conflict of interest exists;

NVest’s Compliance Officer shall report on the status of the actual or potential conflict of interest in NVest’s compliance report submitted to the Financial Services Conduct Authority required by the Act.

Disclosure of conflicts of interest

NVest has adopted the following disclosure measures:

NVest shall disclose to a client any conflict of interest in respect of that client;

The disclosure shall be made in writing at the earliest reasonable opportunity. The disclosure may be communicated by way of appropriate electronic media;

The disclosure shall include the nature of any relationship or arrangement with a third party that gives rise to a conflict of interest;

The disclosure shall be made in sufficient detail to enable the client to understand the exact nature of the relationship or arrangement and the conflict of interest;

The disclosure shall include the measures taken to avoid or mitigate the conflict;

The disclosure shall include any ownership interest or financial interest, other than an immaterial financial interest, that NVest or a Representative of NVest may be or become eligible for;

The disclosure shall include a reference to NVest’s Conflict of Interest Management Policy and how it may be accessed.

Consequences of non-compliance

Where an investigation concludes that a Key individual, Directors, Representative or Employee of NVest has indeed failed to disclose an actual or potential conflict of interest, NVest shall immediately take appropriate disciplinary steps and corrective actions against such Key individual, Director, Representative or Employee. Any failure by a Key individual, Director, Representative or Employee to comply with the Conflict-of-Interest Management Policy will be considered a serious form of misconduct.

Annexure A: List of Associates

In terms of Section 3A(2)(b)(iii) of the General Code of Conduct, a Conflict-of-Interest
Management Policy must include a list of all the FSP’s associates.

Annexure B: Ownership interests held by NVest

In terms of Section 3A(2)(b)(v) of the FAIS General Code of Conduct, a Conflict of Interest Management Policy must include the names of any third parties in which the FSP holds an ownership interest.

Annexure C: Ownership interest held in NVest

In terms of Section 3A(2)(b)(vi) of the FAIS General Code of Conduct, a Conflict-of- Interest Management Policy must include the names of any third parties that holds an ownership interest in the provider.

Annexure D: Type of financial interest & entitlement thereto

It is not the policy of NVest to encourage any form of financial interest as incentive for giving/receiving business. Refer to the Table below for financial interests, other than those already indicated above, which may be accepted only if specific requirements are met.

Application to be made by email and all written approvals must be filed with the Gift Register

Annexure E: Unavoidable conflicts identified