Conflict of interest management

“Associate” –

1. In relation to a natural person, means –
1. a person who is recognised in law or the tenets of religion as the spouse, life partner or civil union partner of that person;
2. a child of that person, including a stepchild, adopted child and a child born out of wedlock;
3. a parent or stepparent of that person;
4. 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;
5. a person who is the spouse, life partner or civil union partner of a person referred to in subparagraphs (ii) to (iv)
6. a person who is in a commercial partnership with that person;
2. In relation to a juristic person –
1. 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;
2. which is a close corporation registered under the Close Corporation Act, 1984 (Act No. 69 of 1984), means any member thereof as defined in section 1 of that Act;
3. which is not a company or a close corporation as referred to in subparagraphs (i) or (ii), means another juristic person which would have been a subsidiary or a holding company of the first-mentioned juristic person-
   1. had such first mentioned juristic person been a company; or
   2. in the case where the other juristic person, too, is not a company, had both the first mentioned juristic person and that other juristic person been a company;
4. means any person in accordance with whose directions or instructions the board of directors of or, in the case where such juristic person is not a company, the governing body of such juristic person is accustomed to act;
3. In relation to any person –
1. means any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which governing body is accustomed to act in accordance with the directions or instructions of the person first mentioned in this paragraph
2. includes any trust controlled or administered by that person;

“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, -

1. influence the objective performance of his or her or its obligations to that client; or
2. prevent a provider or representative from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client, Including, but not limited to –
   1. a financial interest;
   2. an ownership interest;
   3. any relationship with a third party

“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

1. an ownership interest;
2. training, that is not exclusively available to a selected group of providers or representatives, on
   1. products and legal matters relating to those products;
   2. general financial and industry information;
   3. specialised technological systems of a third party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training;
3. a qualifying enterprise development contribution to a qualifying beneficiary entity by a provider that is a measured entity;

“immaterial financial interest” means any financial interest with a determinable value, the aggregate of which does not exceed R1000 in any calendar year from the same third party in that calendar year received by –

1. a provider who is a sole proprietor; or
2. a representative for that representative’s direct benefit;
3. a provider, for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representatives;

“provider” means an authorised financial services provider, and includes a representative;

“third party” means –

1. a product supplier;
2. another provider;
3. an associate of a product supplier or a provider;
4. a distribution channel;
5. any person who in terms of an agreement or arrangement with a person referred to in paragraphs (a) to (d) above provides a financial interest to a provider or its representatives.

Before NFT concludes a new business arrangement, we will consider whether the proposed arrangement will present any potential conflict of interest. It will be the responsibility of each representative entering into the relationship on behalf of us to ensure that this identification process is carried out and appropriately documented before the relationship with a party is entered into. All representatives will be accountable to ensure that the necessary reviews of all existing business arrangements are conducted at least annually to assess whether a potential conflict of interest exists in the light of changing circumstances.

In general, representatives are required to disclose to the client where actual or potential conflict of interest exists in a purported transaction. However, in other instances, representatives are required to report to the Key Individual where a conflict of interest exists on a specific transaction. The Key Individual together with the Compliance Officer will look at surrounding circumstances to come up with appropriate and adequate measures that will assist with avoiding conflict of interest. These will be disclosed to the client when advising the client about the existence of the conflict of interest.

Where conflict of interest cannot be avoided, appropriate and adequate measures to mitigate such conflict will differ from one case to another and these will be disclosed to the client.

Where a conflict of interest is identified, representatives are required to disclose to the client in writing and at the earliest convenience:

1. the existence and description of the conflict of interest,
2. its impact,
3. measures taken, in accordance with this policy to avoid or mitigate the conflict; and
4. the client’s free choice on whether to continue with purchasing the product.

Representatives are also required to inform the Key Individual about the existence of such a conflict of interest.

Key Individuals and Management are responsible to ensure that appropriate disclosures are made.

Once reported, the transaction will be entered into the Conflict of Interest Management Register which will be kept by the Key individual.

Appropriate training will be provided to all employees to ensure that they understand their responsibilities under this policy. The Key Individual will monitor compliance with this policy and will perform the necessary reviews in consultation with Management to ensure that appropriate procedures and processes are in place and effective to comply with the policy.

In terms of FAIS, NFT may only receive or offer the following financial interest from or to a third party –

1. commission authorised under the Short-Term Insurance Act, 1998 (Act No. 53 of 1998);
2. fees authorised under the Short-Term Insurance Act, 1998 (Act No. 53 of 1998);
3. fees for rendering a financial service in respect of which commission or fees referred to in (1) and (2) is not paid, if those fees –
   1. are specifically agreed to by a client in writing; and
   2. may be stopped at the discretion of that client;
4. fees or remuneration for the rendering of a service to a third party;
5. subject to any other law, an immaterial financial interest; and
6. a financial interest, not referred to above for which consideration, fair value or remuneration that is reasonably commensurable to the value of the financial interest, is paid by that provider or representative at the time of receipt thereof.

Employees of NFT do not earn any variable remuneration based on the number of sales or as a result of any claims outcomes. NFT and its employees are not authorised to sell, and may not accept remuneration for selling, the products of other product suppliers.

NFT may not offer any financial interest to a representative based on the quantity of business secured for NFT without also considering the delivery of fair outcomes for clients

Any deliberate action by an employee of NFT to contravene this policy will be subject to disciplinary action which may result in dismissal.

Third parties in which NFT holds an ownership interest: None.

Third parties who hold an ownership interest in NFT:

• Yellowwoods Capital Holdings (Pty) Ltd*;
• Sand Olive Investments (Pty) Ltd*;
• Deutsche Investitions- Und Entwicklungsgesellschaft Mbh;
• International Finance Corporation; and
• Foundry Holdings B.V.

*Entities are associates of Hollard.