Throughout this manual the term “staff” shall be taken to include employees, Appointed Representatives, brokers, subcontractors and anyone performing duties on behalf of or providing services to Stonypath Management Ltd. (T/A Capiteus)
This manual provides a general overview of Capiteus compliance systems and sets out the policies and procedures that are to be followed to ensure that Capiteus and its staff are complying with all applicable legal and regulatory requirements and also the highest standards of corporate governance.
This manual represents the bare minimum requirements, and internal operating procedures for Capiteus will go beyond these compliance procedures.
All staff of Capiteus as well as individual representatives are required to be familiar with the contents of this manual. If you require further explanation on any particular topic, the statements of policy or any other compliance matter, please contact the Compliance Officer.
You are expected to read this manual on joining Capiteus and to refer back to it from time to time to ensure you are familiar with any updates which may have been introduced.
Adherence to the provisions of this manual serves to protect both the individual and Capiteus against criminal prosecution, regulatory sanctions and civil action. Staff should be aware that breaching its provisions could result in disciplinary action, including dismissal.
1.1 BOARD RESPONSIBILITY
Ultimate responsibility for compliance rests with the Board of Directors of Capiteus. The Compliance Officer will be invited to attend board meetings of Capiteus to give a verbal report on all matters relating to compliance. When required, the Compliance Officer will provide the board with written reports on compliance matters.
1.2 CAPITEUS STANDARDS FOR COMPLIANCE
Capiteus is committed to the highest standards of integrity throughout its business and promotes and requires a strong culture of compliance. That culture is built on a system of ensuring that there are clear reporting lines and accountability. Capiteus encourages a culture of openness, where any issues/concerns should be escalated to the Board of Directors.
1.3 INTEGRITY/TREATING CUSTOMERS FAIRLY
Capiteus staff must observe the highest standards of integrity and fair dealing at all times. Clients should be treated fairly in all respects. Capiteus staff must take reasonable care to ensure the suitability of any advice given.
1.4 SKILL, CARE AND DILIGENCE
Capiteus staff should act with due skill, care and diligence.
1.5 MARKET CONDUCT
Capiteus staff must observe the highest standards of market conduct at all times. They should comply with any code or standard in force in the markets or countries in which Capiteus operates from time to time.
1.6 COMMUNICATIONS WITH CLIENTS
Capiteus staff should take reasonable steps to give clients, in a comprehensible and timely way, any and all information needed to enable clients to make a balanced and informed decision.
1.7 CONFLICTS OF INTEREST
Capiteus staff should take steps to avoid any conflict of interest arising, or where conflicts do arise, should ensure fair treatment to all Capiteus clients by disclosure, internal rules of confidentiality, declining to act, or otherwise. Capiteus staff should not unfairly place their own interests above those of clients.
1.8 CLIENT MONIES
Capiteus staff do not handle client monies at any time. Capiteus staff must not accept a cheque made out to the company itself (unless it is a cheque in settlement of charges or disbursements for which the company has issued a bill to the client), the staff member, or handle cash.
1.9 MANAGEMENT AND CONTROL
Capiteus staff should organise and control their internal affairs in a responsible manner, keeping proper records at all times. Where Capiteus staff themselves employ staff or subcontractors, or are responsible for the conduct of investment business by others, they should have suitable arrangements in place to ensure that such staff, subcontractors or others are suitable, adequately trained and properly supervised and that the provisions of this compliance manual are extended to such staff, subcontractors or others.
1.10 RELATIONS WITH REGULATORS
Capiteus shall deal with its regulators in an open and co-operative manner and keep the local regulator promptly informed of anything concerning Capiteus, which might be reasonably expected to be disclosed.
1.11 POLICY ON MANAGEMENT CONTROL
Capiteus staff or its representatives which are subject to regulation need to have adequate management controls to ensure that business is conducted in accordance with their local regulatory requirements at all times.
1.12 PRIME RESPONSIBILITY
Capiteus’ Managing Director is responsible for ensuring that a rigorous system of internal controls and compliance is established to support its business. He/She must make appropriate arrangements for the activities detailed below to be carried out. He/She may delegate some or all of the activities (but not the prime responsibility) to a Compliance Officer or a General Manager.
1.13 GENERAL RESPONSIBILITY
It is important to stress the responsibilities imposed on Capiteus staff by this Compliance Policy extend to any staff, subcontractors or others engaged by Capiteus staff on the conduct of Capiteus business and that such persons therefore have a duty of compliance. The Managing Director should ensure that all staff are aware of this duty and that a commitment to compliance exists at all levels within the company. Compliance with regulatory requirements and the observance of the highest standards of business conduct should be accepted throughout the company as an inalienable part of everyday business.
The Compliance Officer must have direct and open access to the Managing Director (or deputy during absences) at all times and should be demonstrably supported by that Officer.
The Compliance Officer must be sufficiently independent to be able to perform his/her duties objectively.
Adequate resources must be allocated to compliance work to enable the functions to be carried out effectively and kept up to date.
The Compliance Officer must have access, in pursuit of his/her duties, to all business units within the company and to all records, paperwork and meetings however confidential.
The Compliance Officer should have the status, authority and personality to challenge anyone about any action and the tenacity to follow up their concern and achieve a satisfactory conclusion when necessary.
1.19 POLICY ON COMPLIANCE ACTIVITIES
The activities that the company should carry out are detailed below; they should cover all the regulatory requirements that are applicable both to the financial affairs of the company and to the conduct of its business. These activities are not exhaustive. Capiteus will review and amend these procedures in response to changing circumstances.
1.19.1 STAFF TRAINING
Capiteus should establish procedures to ensure that all levels of staff are aware of the relevant regulatory requirements and of what must or must not be done to secure compliance with those requirements. This should include an explanation of the spirit of rules as well as the letter, the promotion of good practice throughout the company and keeping staff up to date with changes in rules.
1.19.2 OPERATING PROCEDURES
Capiteus should ensure that the company's operating procedures and computer systems include well-defined steps for complying with the detail of regulatory requirements. This should include the maintenance of adequate written records to provide evidence that key activities and controls have been followed and effected at all levels.
1.19.3 REGULATOR MONITORING
Capiteus should monitor activities within the company to ensure as far as possible, that business is conducted in accordance with regulatory requirements and follow up any actual or potential problems to ensure that corrective action is taken where necessary. This monitoring may be done on a random or selective basis but should be risk-based and should be recorded in writing.
The Compliance Officer is responsible for regular reviews of the business conducted. These will involve various checks to ensure that recommendations are appropriate and to assess the ongoing competence of the Investment Advisers.
1.19.4 CUSTOMER COMPLAINTS
Capiteus must ensure it has in place a complaints procedure, which is in line with relevant regulatory requirements to deal with customer complaints promptly.
1.19.5 NOTIFICATION REQUIREMENTS
Where required to do so, Capiteus must notify local regulators of all events as set out by the rules and provide all financial and other regular returns on time.
1.20 COMPLIANCE POLICY STATEMENT
It is a Capiteus policy to observe and maintain the highest standards of integrity and fair dealing, to observe the highest standards of conduct and to act with due skill, care and diligence in conducting its affairs and those of its clients. This policy requires all staff to remain 'fit and proper' to perform their business function, to comply with all applicable laws, rules and regulations and to follow the principles set out by the local regulators.
The policies and procedures outlined in this manual apply to all business and activities conducted on Capiteus’ behalf and all staff are personally responsible, as a condition of their contract, to know and follow the policies and procedures that apply to Capiteus.
1.21 GENERAL OVERVIEW
Staff of Capiteus and any persons employed or otherwise engaged by its staff, should take account of and adhere to all compliance procedures, sales processes and administrative procedures as may be published by Capiteus from time to time.
1.22 POLICY ON THE ROLE OF COMPLIANCE
The local Compliance function has responsibility for compliance with local regulatory requirements. The local Compliance function has the responsibility to:
act as adviser to its Board of Directors and Senior Management on compliance issues
maintain an up-to-date understanding of relevant aspects of prevailing business practice in the company and the application of regulation to the business
undertake compliance activities using a risk-based approach.
1.23 RESPONSIBILITIES AND AWARENESS
As an international company operating across borders, Capiteus and its staff must adhere to a variety of laws, regulations and policies that apply to its business. Knowing about and complying with all of them can seem onerous and it is realised that staff cannot be familiar with every rule. However, they have a personal responsibility to know the rules that apply to their particular activities and understand what they mean.
Individuals are responsible for avoiding violations of any relevant rule and it is a personal obligation to know when to seek guidance about the requirements of a rule or regulation. Ignorance of the rules is not an acceptable reason. If a member is ever in doubt as to the meaning, interpretation or application of any particular requirements, they should contact the Compliance Manager.
1.24 PROFESSIONAL STANDARDS
Staff of professional bodies must adhere to the standards required by those bodies.
1.25 COMPLIANCE OFFICER
The Compliance Officer will maintain a register of any breaches of applicable laws, rules or guidelines to facilitate proper checking or auditing of such breaches. Copies of any documentation/correspondence regarding the breaches will be kept with the register. The Compliance Officer will also conduct a rolling program of compliance reviews of the business.
The Compliance Officer will report to the Board of Directors and will provide written reports when instructed to do so.
2. STAFF PRINCIPLES OF CONDUCT
Capiteus staff will observe the highest standards of integrity and fair dealing in the conduct of its business.
2.2 SKILL,CARE AND DILIGENCE
Capiteus staff will act with due skill, care and diligence towards its customers and counter-parties.
2.3 CONFLICTS OF INTEREST
Capiteus staff must either avoid any conflict of interest arising or, where a conflict does arise, should ensure fair treatment to all its customers by disclosure, internal rules of confidentiality, declining to act, or otherwise. Capiteus staff should not unfairly place their own interests above those of Capiteus’ customers and where a properly informed customer would reasonably expect that the firm would place its interests above his/her own, the firm should live up to that expectation.
2.4 ORGANISATION, CONTROL AND RISK MANAGEMENT
Capiteus staff will organise and control their own internal affairs in a responsible manner, keeping proper records, and will have adequate arrangements to ensure that staff are suitable, adequately trained and properly supervised and that the provisions of this Compliance Policy are extended to them. Capiteus staff must organise and control their affairs effectively for the proper performance of business activities and be able to demonstrate the existence of adequate risk management systems.
Capiteus staff will be transparent in their business arrangements, including those with parties unrelated to Capiteus.
2.6 INFORMATION ABOUT CLIENTS
All Capiteus staff will seek from clients they advise, any and all information about their circumstances and objectives which might reasonably be deemed relevant in enabling staff to fulfil their responsibilities to clients and to meet specific regulatory requirements.
2.7 INFORMATION FOR CLIENTS
All Capiteus staff are required to take reasonable steps to give a client, in a comprehensible and timely way, any and all information needed to enable them to make a balanced and informed decision. Capiteus staff must similarly be ready to provide a client with a full and fair account of the fulfilment of their responsibilities to him/her.
2.8 CLIENT MONIES OR INVESTMENTS
Capiteus staff do not handle client money. Capiteus staff will not accept a cheque or any other form of payment made payable to the company (unless it is a cheque in settlement of charges or disbursements for which Capiteus has issued a bill to the client). Capiteus staff do not own the investment, or any part of the investment, which the client has invested in.
2.9 MARKET PRACTICE
Capiteus staff will observe the highest standards of market conduct and should also comply with any code of standard as in force from time to time and issued or approved by the relevant local regulator(s).
2.10 FINANCIAL RESOURCES AND INSURANCE
Capiteus staff are required to maintain and be able to demonstrate the existence of adequate financial resources and adequate insurance to meet their business commitments and to withstand the risks to which their business is subject.
Capiteus maintains professional indemnity insurance for the protection of its clients in the event of negligence by any of its staff, Capiteus staff and/or properly appointed associates.
2.11 RELATIONS WITH REGULATORS AND OTHER AUTHORITIES
Capiteus is expected to deal with its local regulators in an open and co-operative manner and to keep the regulator promptly informed of anything which might reasonably be expected to be disclosed to it.
Capiteus will maintain the relevant permissions from its regulator to conducts business.
2.13 COMMUNICATING WITH REGULATORS
The purpose of this procedure is to ensure that regulatory correspondence does not exclude or 'shortcut' the Compliance Officer and that the General Manager and Directors are aware of all regulatory issues affecting the companies for which they are responsible.
The following procedure must be adhered to in regard to communications with regulators:
Outgoing letters, phone calls or e-mails
2.13.1 the Compliance Officer will initially involve the General Manager of Capiteus, if appropriate
2.13.2 the Compliance Officer will always be notified of any proposed communications with any regulator and will act as a central point and collate any proposed communications to regulators. This includes phone calls and e-mails in the form of memoranda
2.13.3 the Compliance Officer will pass these to the General Manager (or Managing Director in his absence), who may sanction immediate release - the sanction will indicate who is to sign the document - this could be the Managing Director or General Manager of Capiteus, the Compliance Officer or other person
Incoming letters, phone calls or e-mails from regulators
These will be copied to the Managing Director, General Manager and the Compliance Officer.
Compliance will maintain a log of incoming and outgoing communications, however they are sanctioned.
Certain classes of routine or mundane correspondence (i.e. financial returns) are exempt from this procedure.
It will be a disciplinary matter if this procedure is breached without good cause, which could lead to summary dismissal.
Regulatory Co-operation and Whistleblowing
This procedure does not override the regulatory requirement for openness and co-operation with the local regulators and official bodies. Likewise, it does not override the requirement for the Compliance Officer to exercise independent judgement nor for any person to operate the Whistleblowing policy.
3. INFORMATION ABOUT THE COMPANY
Capiteus staff should take reasonable steps to ensure that a client to whom they provide or transact an investment is given the following information prior to the commencement of the provision of services:
identity of the company, its business address and telephone number
details in relation to the regulatory approvals and permissions granted to the company and by which bodies
the activities the firm undertakes so that the client is able to assess the scope of the company's responsibilities
the identity and status within the company of staff and other relevant representatives with whom the client will have contact
details of any cancellation rights or rights of reflection that may apply
any rights of statutory compensation (if applicable)
procedure by which any complaint must be made
outline of policies in relation to conflicts of interests and inducements
other relevant terms of business including risk warnings that may be applicable – for example those listed on the company’s website
the languages in which the client may communicate with the company
4. GIFTS AND ENTERTAINMENT
Capiteus staff and staff must not accept gifts from, or provide gifts to, an individual or firm with whom they conduct, or intend to conduct, business on behalf of Capiteus, unless it can be demonstrated that doing so creates no conflict of interest. Entertainment accepted by an employee and acceptance of such should not create any conflict of interest.
Since the giving and receiving of gifts, and the acceptance and provision of entertainment, can be construed as causing a conflict of interest between the duties of staff and Capiteus, or its clients, or between Capiteus and other financial institutions, the propriety of such benefits will be judged on the basis of whether or not they are reasonable and not excessive when viewed from any perspective.
Capiteus staff must obtain the following approvals before giving or receiving a gift with a value greater than £50:
4.3.1 cash gifts of any value may not be given or received except to properly registered charities and only with the prior approval of the Compliance Officer
4.3.2 gifts valued up to £100 may be given or accepted upon the approval of the Compliance Officer
4.3.3 gifts valued over £100 may be given or accepted upon the additional approval of the Managing Director or General Manager
All gifts or benefits given or received will be registered with the Compliance Officer detailing the donor, recipient and approximate value.
Meals and entertainment, being legitimate business expenses, will normally be acceptable and need not be declared, provided that they cannot be reasonably be regarded as giving rise to a conflict of interest. This would include, for example a drinks reception, lunches, formal dinners and presentations.
Invitations to sporting, social or cultural events, which normally have a ticket price, count as 'gifts' and should be treated accordingly. Travel, membership of a club or use of a facility on a no-charge or subsidised basis also constitute gifts.
Sporting, cultural and other social invitations provided by Capiteus as entertainment for clients are acceptable.
A member of staff who takes advantage of a gift made to a spouse, partner or other associates should consider whether it should be declared in line with the above.
5. WHISTLEBLOWING POLICY
The aim of this policy is to provide a procedure under which individuals, who have reasonable grounds to believe than an incident of workplace malpractice has occurred, is occurring or is likely to occur within the organisation, are able to raise their concerns.
Capiteus is committed to creating a working environment, which operates in the best interests of its clients and staff. In this regard, Capiteus expect staff to act within the law at all times, applicable codes of practice, and to apply the highest possible standards and business ethics in all areas of the company's activities. Any person found to be knowingly and culpably operating or behaving in a manner, which is in contravention of these standards will be subject to disciplinary actions up to and including dismissal.
The primary aim of this policy is to prevent workplace malpractice from occurring in the first place. If it happens, it is Capiteus' objective to prevent it from recurring. Capiteus encourages staff to raise their concerns about any incidents of or intent to commit malpractice in the workplace at the earliest possible stage. This policy sets out the correct procedure for raising such concerns. It should be noted that this policy is aimed at preventing regulatory or legal malpractice. The Whistleblowing Policy should not be abused, for example to raise a staff grievance issue that would normally be dealt with by the Line Manager.
By following the procedural steps set out in this policy, staff will be able to raise genuine concerns about malpractice within the workplace without fear of harassment or victimisation.
6. DEFINITION OF MALPRACTICE
For the purpose of this policy, the following matters constitute malpractice:
commission of criminal engagement
occurrence of a miscarriage of justice
material breach of financial services regulations or principles
failure to comply with a legal/statutory obligation
damage to the environment
bullying, harassment or victimisation
endangerment of the health and safety of any individual
deliberate concealment of any information indicating any of the above matters
6.1 PROCEDURE - RAISING A CONCERN
If a staff member has a concern about workplace malpractice or any intent to commit malpractice, they should initially discuss this with their Line Manager, who will usually be in the best position to assist. He or she will attempt to resolve the matter as promptly as is reasonably practicable.
There may be circumstances where a member feels unable to approach the Line Manager and in these circumstances should raise the concern with the General Manager or Compliance Officer. An anonymous letter is not considered a valid way to raise a concern.
All concerns will be dealt with in confidence. Exceptionally, there may be circumstances where it will not be practicable to pursue a complaint or to deal with an alleged wrongdoer without the identity of the complainant becoming known.
Hearing your concern
The person responsible for hearing a staff member’s concerns will normally arrange a meeting with that person. The staff member may be required to set out their concerns in writing in advance of the meeting. These concerns will then be discussed in full at the meeting and the person hearing the complaint will decide if any further action is needed and if so, what the appropriate action will be. This may include requiring the member to attend a further meeting with a higher level of management or asking them to provide further evidence that is considered necessary.
The staff member will, unless circumstances do not permit, be told what action has been decided and such information should be treated with strict confidence.
If the concern is found to be valid then one or more of the following steps (which is a non-exhaustive list) may be appropriate:
referral of the matter to the Board of Directors with a view to a formal investigation being carried out
referral of the matter to the appropriate external regulatory body for further investigation
referral of the matter to the police
As stated above, the staff member will normally be informed of any decision taken and will be required to keep this decision strictly confidential.
6.2 EXTERNAL DISCLOSURE
If, after having followed the procedural steps set out above, the staff member remains genuinely and reasonably dissatisfied with the outcome, they may raise their concern on a confidential basis with the appropriate external regulatory body, however, they would be requested to inform the Compliance Officer at least seven days before taking such action.
6.3 PROTECTION FROM VICTIMISATION
Provided the staff member raised any concerns in good faith, not out of malice or with a view to personal gain on their part and have reasonable grounds for believing their concerns to be true and have complied in full with the spirit of this policy and procedural steps set out above, Capiteus will do their best to ensure:
6.3.1 the identity of the staff member will not be disclosed at any time unless necessary for the purpose of its investigations or to comply with a legal obligation
6.3.2 the staff member will not be subject to any harassment or victimisation as a result of raising the concern
6.3.3 any supporting evidence relating to their concerns will be kept secure at all times
6.4 DISCLOSURES OUTSIDE THE POLICY
If at any time it is discovered that the staff member has raised a concern maliciously, in bad faith or with a view to personal gain or that they have failed to follow the Whistleblowing policy for disclosure set out above, they will lose the protection provided under this policy. In addition, they may be subject to a disciplinary procedure, including in appropriate circumstances, termination.
7. TREATING CUSTOMERS FAIRLY
Capiteus has embraced and fully subscribes and adheres to TCF policies and cultures. Capiteus will be subject to and judged by the TCF policies set out in its TCF Policy as amended from time to time.
8. COMPLAINTS PROCEDURE
Capiteus publishes a detailed Complaints Procedure which periodically reviewed and can be downloaded at any time from the Capiteus website. All staff are required to be fully conversant with the provisions of the Complaints Procedure and to adhere strictly to the procedures it contains.
9.1 WHAT IS AN ADVERT?
An advert is defined as "every form of advertising, whether in a publication, brochure, hand-out, or letterhead, or by the display of notices or by means of circulars or other documents or by an exhibition of photographs or cinematography films or videos or by way of sound broadcast or television or by the distribution of recordings or by any electronic media or moving image material incorporated in any website or in any other manner."
No staff member shall publish an advert without the prior written approval of Capiteus. From time to time the Company may tactfully disseminate or provide upon request adverts constructed by other firms or providers. Where this is the case, it is the responsibility of the original constructor of that material to ensure that accuracy and other provisions, such as the ones set out forthwith, are adhered to. The entity that is responsible for adverts of this kind may or may not have a policy in relation to it and it is therefore important that Capiteus Adverts and Third Party Adverts are clearly distinguished between and, for the benefit of the reader, Adverts constructed with the purpose of advertising goods, products and services provided by/constructed by Capiteus should be clearly marked as such, and when Capiteus are providing Adverts created by a third party that this is made clear if it is not already – for example, where a third party Advert may have a Capiteus logo present which might result in a lack of certainty as to who constructed the material.
Proposed advertisements should in the first instance be forwarded to the relevant Line Manager for review, who will in turn pass the proposed advertisement to the Managing Director, General Manager or Compliance Officer, who will have to approve a proposed advertisement before publication. The approval of two senior managers is required prior to the publication of any advertisement.
The following sections detail the requirements a proposed advertisement must meet in order to receive approval for publication. Senior Management may require additional steps to be taken or content to be modified/added to before granting approval.
9.2 SYNOPSIS TO BE FAIR
Where an advert states only some of the rights and obligations attached to an investment or only some of the terms and conditions of an investment agreement, there should be sufficient information to give the reader a fair view of the nature of the investment or of the investment agreement. The advert should also state how a written statement of all terms and conditions can be obtained.
Comparisons between investments or financial services should be fair in relation to what is being promoted and to have regard to what is not stated as well as what is stated.
Adverts should contain a summary of the taxation of any investment to which it relates and taxation consequences for investors generally. They should also include a warning that the levels and bases of taxation can change. Where an advert assumes a rate of taxation this should be stated. Where an advert refers to taxation relief it should state that the reliefs are those that currently apply, but that they could change, that the value of the relief depends on the circumstances of the tax payer and should distinguish between the relief that applies directly to investors and to other persons.
9.4 CANCELLATION RIGHTS
Where an advert carries reference to cancellation rights, it should include the period during which investors have the right to cancel and when that period begins.
9.5 PAST PERFORMANCE
Information on past performance should:
9.5.1 be relevant to the performance of the subject of the advert
9.5.2 the source of information to be stated where information is not provided by the supplier
9.5.3 ensure that if not all information is provided, that what is included does not misrepresent the facts, is not unfair or misleading and that by excluding such information, the success of performance over the period is not exaggerated
9.5.4 ensure that the information is presented in a graph or chart so that no information is omitted to give the impression that the rate at which variable quantities have changed
9.5.5 ensure that where adverts refer to units or shares in a collective investment scheme, that comparisons are compared on an offer to bid basis and state the fact that this is the basis of the comparison
9.5.6 ensure that the period illustrated is not less than three years and ending no more than three months before the date of issue of the advert
9.5.6 contain a warning that the past is not necessarily a guide to the future
An advert should not be misleading about the scale of the business activities of the company.
9.6 RISK WARNINGS
All adverts that are not short form or image adverts shall:
9.6.1 contain a statement warning of the risks involved with the investment or a reference to where they can be found.
9.6.2 ensure that where the advert relates to an investment where deductions and expenses are not made uniformly throughout the life of the investment, that it draws attention to the fact that if the investor withdraws his money in the early years he may not get back the amount they invested
9.6.3 ensure that where the advert related to an investment which may fluctuate in value in money terms or which offers income distributions, that there is a statement to the fact that the investor may not get back the full amount he invested
9.6.4 ensure that where an advert offers an investment likely to yield high income, that the investment may fluctuate in monetary terms
9.6.5 ensure that where the investment is in a currency other than that of the country in which the advert is issued, that exchange rate differences may cause the value of the investment to diminish or increase
Where an advert relates to an investment in an authorised or recognised collective investment scheme, it will need to explain the charging structure and whether any of the scheme expenses will be taken out of capital or income and the likely long-term effect of this.
An advert relating to execution-only dealing services must contain a statement that the company’s procedures are such that there may be a delay in the executions of client orders, including the reason for and maximum extent of any such delay.
Every advert in a publication other than a daily newspaper should state the date on which it was first issued on the bottom right-hand corner of the advert. For prospectuses, brochures, handouts or similar material, the original issue date should be on the front or back outside cover page.
9.7 CONTENT OF ADVERTISEMENTS
All adverts shall state:
9.7.1 the name, registered address and main line of business of the company
9.7.2 the main place of business
9.7.3 the relevant Capiteus disclaimer
9.7.4 if relevant, that it is regulated by the local regulator to carry out the financial services business to which the advert relates
10. MONEY LAUNDERING
Neither Capiteus nor its staff wishes to be the channel for criminal activity, or receive funds used for the financing of terrorism. The Company has developed a comprehensive Anti-Money Laundering Policy to which the company and staff will strictly adhere at all times. The Board of Capiteus is responsible for the overall policy regarding the requirement to combat money laundering and terrorist financing.
11. FRAUD PREVENTION
11.1 FRAUDULENT BEHAVIOUR
All staff should be vigilant against attempts to defraud Capiteus, Capiteus staff and/or their clients. Such frauds may be perpetrated by letter, fax, phone, by e-mail, via the Internet or during meetings.
All staff should be alert for:
False Documents - use of stolen, forged or altered documents by criminals
Impersonation - of clients or their agents in order to steal money or obtain information about the client
Identity Fraud - where a criminal attempts to steal information or documents relating to a client so that they can be impersonated. All must be aware of the duty of confidentiality, take care with client documentation and follow shredding and 'clear desk' policies
Advance Fee Frauds – where the intention of the criminal is to obtain an up-front fee for which nothing will be received in return
Cheques - may be stolen, may be bogus or may have had the amounts or payee details changed. Cheque forging/altering can be extremely professional
11.2 FEATURES THAT MAY INDICATE FRAUD
Bad Spelling/Grammar - the criminals may not be the well-educated bankers, lawyers or doctors they pretend to be
Urgency - the criminals may invent deadlines to rush the intended victim into making a mistake
Secrecy - the criminals may urge you to keep the deal confidential to discourage you from talking to those who would advise against it
Gobbledygook - you should be alert to proposed schemes or jargon you do not understand
Lack of Verification - you should be on your guard if you cannot verify the authenticity of a financial document, the address of a contact or the identity of a person or entity
No Physical Address - you should be wary of someone who only gives a mobile phone number or web-based e-mail address such as hotmail.com or gmail.com. Similarly, be wary of a landline or fax which does not work, or whose area code is not appropriate for the country it is supposedly based in
Changing Story - be alert to the criminal who changes his story as you make enquiries into his background or into the proposal being put forward
12. SANCTIONS AND EXPORT CONTROLS
A sanction is a compulsory measure adopted by several nations acting together against a regime or organisation believed to be violating international law. Measures may be economic, diplomatic, cultural or of some other type. They may include freezing of financial assets, a ban on the trade of goods or weapons, and travel restrictions on individuals. Some sanctions will give a specific period of duration, others will have no limit.
12.2 WHO IMPOSES SANCTIONS?
United Nations Sanctions are enforced in law through European Council Directives and relevant local legislation.
In addition, the EU and the USA have frequently imposed sanctions or restrictive measures in recent years, either on an autonomous EU or USA basis, or implementing Resolutions of the Security Council of the United Nations. Sanctions are an instrument of diplomatic or economic nature which seeks to bring about a change in activities or policies such as violations of international law or human rights, or policies that do not respect the rule of law or democratic principles.
Restrictive measures imposed by the EU or the USA may target governments of third world countries, or non-state entities and individuals (such as terrorist groups and named terrorists). They may compromise arms embargoes, other specific or general trade restrictions (important and export bans), financial restrictions, restrictions on admission (visa or travel bans) or other measures, as appropriate.
The Governments of the jurisdictions in which Capiteus and its staff operate are responsible for the introduction of Sanctions of the United Nations, European Union or the USA.
All are required to be aware of the sanctions and to ensure that the investments they handle do not breach the law. Guidance concerning these sanctions may be obtained from the Compliance Officer.
It should further be noted that countries or international organisations not listed above may also choose to use sanctions as a tool to further their political aims. All are required to be alert to the possibility of such sanctions impacting on their activities on behalf of Capiteus and, potentially, their own activities and liberty. If there is any doubt whatsoever about the existence of or applicability of sanctions in a particular case, guidance should be sought from the Compliance Officer.
13. RECORDS RETENTION
13.1 PRACTICAL GUIDANCE FOR STAFF AND APPOINTED REPRESENTATIVES
13.1.1 THE REASON WHY
Capiteus and its staff are under a legal obligation to protect the data it holds on its clients, staff and others with whom it deals. A Capiteus staff member can be prosecuted under relevant local legislation for breaching data protection laws and can be sued by individuals whose rights are infringed. All should be aware that breaching this policy may result in disciplinary action, including summary dismissal. The Data Protection Laws are in addition to other sections of applicable laws and codes, which require client affairs to be kept confidential.
13.1.2 CAPITEUS'S EXPOSURE
All should be aware that criminal gangs seek to obtain client information in order to carry out frauds. Criminals have been known to coerce cleaners and other contractors into stealing or copying documents containing such information. The stealing of rubbish bags and the emptying of bins is also a common practice. Other parties, including private detectives, foreign tax authorities and the media have also from time to time been known to exploit such information. Capiteus' exposure is therefore not limited to infringements of the law.
13.1.3 CLEAR DESK POLICY
Documents that include a client name and address are to be kept secure overnight. This means they must be stored in fireproof lockable cabinets, or in locked drawers. The clear desk policy does not apply to any room, which is locked overnight and to which the cleaners do not have access out of office hours.
All paper waste, which includes a client’s name or address is to be shredded. Waste should be put into a shredding bag by the end of the working day. It should not be left in loose piles, boxes or in unlocked drawers. Shredding bags will be placed in locked storage until they are collected for destruction.
13.1.5 CARELESS TALK COSTS JOBS
All need to be aware that any comment made on a file concerning an individual could have to be disclosed to that individual. This includes the contents of e-mails and electronic documents as well as hand-written documents, minutes and memos. It is an offence under the law to destroy, hide and delete such records after a request has been made for them to be produced. Staff should therefore take care to only include factual, non-judgemental information on a file. Careless personal comments may prejudice Capiteus or a Capiteus staff member/Appointed Representative in any legal action brought against them.
13.1.6 COMPUTER SECURITY
All information stored on a computer is subject to the data protection laws. The contents of all computer records which refer to an individual may have to be disclosed to that individual, so again, care is required in any e-mails or other memos stored on the system. Any abbreviations, codes or flags may also have to be explained. It is an offence under the data protection laws to destroy, hide or delete computer records after a request has been made for them to be produced.
13.1.7 PORTABLE DATA
Remember that data carried on laptops, portable telephones, other portable storage media, or in a personal filing system will also be covered by the data protection laws.
13.2 PROPER USE OF DATA
Capiteus and Capiteus staff, may only use data for the purpose it was intended. This means it cannot be passed onto people outside Capiteus except in carefully defined circumstances. Staff are already bound by the confidentiality rules. Capiteus and/or Capiteus staff will not sell or otherwise exchange personal data with third parties except where this is permitted within the scope of the contracts the company has with the individuals involved. Moreover, staff of Capiteus are expressly forbidden to take home or remove from any office any piece of information relating to any client or contact of the firm, save for in electronic form where a laptop or other similar item is removed for a busines purpose, without the express written permission of the General Manager or Compliance Officer. Such information if removed with approval should be treated in the strictest of confidence and appropriate measures should be taken, including in relation to home networks and cybersecurity, to ensure its safety and security at all times. In no instance should any such information be printed outside of a Capiteus office premises.
Marketing materials shall be considered as advertisements and as such shall be subject to approval as outlined in section 9 of this document.
In addition to Senior Management approval, Compliance will check all marketing materials against the requirements of the relevant data protection laws. Capiteus staff and their staff shall not send marketing materials to any person who has specifically asked not to receive such information.
13.4 ACCURACY OF DATA
Data should be accurate and up-to-date, especially where this leads to decisions being made about an individual. Capiteus staff should ensure that Fact-Finds/Client Profiles and computer static data are updated whenever they become aware of changed circumstances.
13.5 RELEVANT AND NECESSARY
There is a requirement that information is only recorded which is relevant and necessary for a Capiteus staff member to carry out his/her work. This is particularly relevant to 'sensitive' data such as race, religious belief, sexual orientation, political affiliation, health and criminal convictions.
13.6 DATA RETENTION
Capiteus staff are required to keep records of all business and transactions for a minimum period of seven years. Following this period, records can be archived in storage.
13.7 DATA TRANSFER
Restrictions are made on the transfer of personal data outside of Capiteus. In general, personal data can be transferred to other Capiteus entities and other persons, when this is necessary to perform duties towards the client. If in doubt about the rules, Compliance should be consulted.
13.8 STAFF RIGHTS
Capiteus staff have rights to access certain data held by Capiteus about them (but the relevant data protection laws permit the company to withhold specific data). This will also apply to former staff and persons who have unsuccessfully applied for jobs.
13.9 RIGHTS OF ACCESS TO INFORMATION
Any person, including clients, former clients, potential clients, staff or contractors, has the right to request access to information held by Capiteus and/or a Capiteus staff member/Appointed Representative about them. Any such request must be referred immediately to Compliance, who will advise on the exact procedure. In some instances, it will not be lawful to supply such information, in other instances, Capiteus and/or Capiteus member/Appointed Representative may be obliged to filter or explain the information provided. Compliance will maintain a register of Data Requests and will ensure that any requests are satisfied within the relevant legally prescribed limits.
13.10 RIGHT TO PREVENT PROCESSING
Any person, including clients, former clients, potential clients, staff or contractors, has the right to request that processing of data by Capiteus and/or Capiteus member/Appointed Representative ceases. This may simply be a request such as 'stop sending me marketing flyers' or 'stop writing to my son'. Any such request must be referred immediately to Compliance who will advise on the course to be taken. In some instances it will not be lawful to comply with the request. All such requests will be logged by Compliance on the register of Data Requests. Compliance will monitor the outcome of any such request.
13.11 CONTRADICTIONS AND QUERIES
Data Protection Law can conflict with other Legislation, for example Employment Law and Anti-Money Laundering regulations. If there is doubt, Compliance should be consulted.
14. DEALING WITH AND ADVISING CLIENTS
Adequate records must be maintained of all meetings and correspondence with the client. Such records must be held for a period of not less than six years (or such longer period where required by local law, accounting practices, or legislation). All staff shall present to Capiteus any and all records relating to clients whenever required to do so by Capiteus management, whether or not their own association with Capiteus remains in force or has been terminated for any reason whatsoever.
14.1 INFORMATION GATHERING
Capiteus clients broadly engage the company on an execution only basis and as such warrant and confirm to the company that they are entering into their chosen investment on the basis of their own independent analysis of its risks and further that they consider the investment suitable for their own circumstances. This does not however release Capiteus staff from the more general responsibility of satisfying themselves and being able to demonstrate if required to do so at a later date by means of written records meeting notes and similar that the client has in fact been provided with ample information and afforded ample opportunity to raise queries in order to reach those conclusions and subsequently provide those warranties to the company
As part of the requirement on Capiteus staff set out in 15.1 above, it is essential that clients are aware of the medium to long term nature of investments and that they maintain such adequate liquidity for emergencies as may be relevant to their own circumstances but in no case less than 3 months’ reserves.
15. EXECUTION POLICY
Capiteus operates a Best Execution Policy in place to which it expects all staff to adhere.