Investment banking
Phone numbers
Conflicts of Interest Policy
CONFLICTS OF INTEREST POLICY
I. GENERAL
In the content of sound, clear, transparent and effective provision of investment and / or ancillary service its clients, National Bank of Greece Group, of which United Bulgarian Bank is a subsidiary, has established, implemented and maintained this policy, which is set out in writing, on the identification and management of conflicts of interest, between United Bulgarian Bank (hereinafter “the Bank”), the Group and their clients or between one client and the other.
This policy is appropriate to the size and organization of NBG Group, as well as the nature, scale and complexity of its business activities. The conflicts of interest policy aims at providing the clients with investment and / or ancillary services of high quality and protecting their assets, as well as their respective rights.
Specifically, this policy identifies, with reference to the investment services and activities and / or ancillary services carried out by or on behalf of the NBG Bank and its subsidiaries, the circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more clients; and specifies the procedures to be followed and the measures to be adopted in order to manage such conflicts.
II. DEFINITIONS
For the purposes of this policy, the following definitions apply:
Group
The Group consists of a parent undertaking –National Bank of Greece (NBG), its subsidiaries including the Bank and entities in which NBG Bank or its subsidiaries hold a participation (higher than 10%), as well as undertakings linked to each other through these kind of relationships:
- an undertaking and one or more undertakings, are managed on a unified basis pursuant to a contract concluded with that undertaking or provisions in the memorandum or articles of association of those undertakings; or
- the administrative, management or supervisory bodies of that undertaking consist for the major part of the same persons during the financial year and until the consolidated accounts are drawn up.
Relevant persons
- the directors, the shareholders that have a percentage of participation or voting rights equal or higher than 5% of the share capital of the Bank and of the quoted Subsidiaries of the Group, the partners, the members of the BoD, the managers and the tied agents as included in the Public Register, (any individual or legal entity that, under full and unconditioned responsibility of the entity for whom it actions, based on a work, mandate or agent contract, promotes to customers and potential customers investment services and ancillary services, assume and remit clients’ instructions and orders regarding financial instruments or investment services, invest financial instruments, provide consultancy services to clients and potential clients regarding these instruments and services) of the Bank and the Group.
- the directors, the shareholders, the partners or the members of the BoD and the managers of tied agents of the Bank and the Group;
- the employees of the Bank, of the Group and of their tied agents who are involved in the provision of investment services and activities by the Bank and the Group;
- any other natural person whose services are placed at the disposal and under the control of the Bank, the Group or their tied agents and who is involved in the provision of investment services and activities by the Bank and the Group;
- the natural persons, who are directly involved in the provision of services to the Bank, the Group or to their tied agents, under an outsourcing agreement for the purpose of the provision of investment services and activities by the Bank and the Group.
Person with whom a relevant person has a family relationship:
- the spouse of the relevant person or the partner of the relevant person considered by the current legislation as equivalent to a spouse;
- the dependent children or stepchildren of the relevant person (under age children and children studying or supported financially by the relevant person); and
- any other relatives of the relevant person, who have shared the same household as that person for at least one year on the date of the personal transaction concerned.
Client: as client is considered any natural or legal person to whom the Bank and / or any other entity of the Group provides investment and / or ancillary services.
Investment Services: as investment services and activities are consider the following:
- reception and transmission of orders in relation to one or more financial instruments;
- execution of orders on behalf of clients;
- dealing on own account;
- portfolio management, on Bank’s and / or its subsidiaries discretion, in light of an order given by the client which include one or more financial instruments; such a service is provided upon signed agreement;
- provision of personal investment advice to clients, either upon their request or by Bank’s and / or its subsidiaries initiative, in relation to one or more transactions on financial instruments, such a service is provided upon signed agreement;
- underwriting of financial instruments or placing of financial instruments on a commitment or non- commitment basis.
Ancillary Services: as ancillary services are considered the following:
- safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash / collateral management;
- granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the Bank and / or its subsidiaries granting the credit or loan involved in the transaction;
- advice to undertakings on capital structure, industrial strategy and related matters, and advice and services relating to mergers and of the purchase of undertakings;
- provision of foreign exchange services where these are connected to the provision of investment services;
- provision of services related to underwriting of financial instruments / securities;and
- investment research and financial analysis or other forms of general recommendation related to transactions in financial instruments.
Durable Medium: for the purposes stated in the VI section “Disclosure to Clients”, as durable medium is meant any medium which enables a client to store information addressed personally to that client in a way accessible for future reference for a period of time adequate for the purposes of the information and which also allows the accurate reproduction of the information stored.
Investment Research: means research or other information recommending or suggesting explicitly or inexplicitly, an investment strategy concerning one or several financial instruments or the issuers of financial instruments, including any opinion as to the present or future value or price of such instruments intended for distribution channels or for the public, and in relation to which the following conditions are met:
- it is labeled or described as investment research or in similar terms, or is presented as an objective or independent explanation of matters contained in the recommendation; and
- it does not constitute provision of investment advice.
III. SCOPE
The Bank, the Group and their Personnel are obliged to abide by the rules set out in this policy.
The policy applies to:
- the Bank and the Group;
- the relevant persons.
This policy covers any transaction in relation to investment and ancillary services with the clients without any exception and irrespectively of their categorization.
IV. AUTHORIZATION & GOVERNANCE
The Senior Management of the Bank and the Group is responsible for establishing this policy for the identification, prevention and management of conflicts of interest between the Bank and the Group, their managers, employees, partners and their clients, or between one client and the other.
The Bank’s and the Group’s Personnel are obliged to be aware of this policy and act accordingly.
The Senior Management is responsible for reviewing this policy upon recommendation of the Compliance Division, when required, and in line with changes in the regulatory and legal environment, as well as changes in the Bank’s strategic objectives, or in the internal (organizational - business) and external (market) environment.
V. IDENTIFICATION AND MANAGEMENT OF CONFLICT OF INTERESTS
The Bank and the Group have established a set of measures and procedures appropriate to their size and organization and the nature, scale and complexity of their business activities, in order to prevent or manage conflicts of interest and ensure that the relevant persons treat the clients in a fair and impartial manner and have the appropriate level of independence.
The relevant persons must be prepared in order to manage any potential conflicts of interest brought to their attention that could possibly damage their clients’ best interest.
For the purposes of determining the types of conflicts of interest that arise in the course of providing investment and / or ancillary services or a combination of services, or by any other way and whose existence may damage the interests of a client; the Bank and the Group consider, by way of specific and appropriate criteria and procedures, whether the Bank or a subsidiary or a relevant person or a person directly or indirectly linked by control to the Group, is in any of the following situations:
- is likely to make a financial gain, or avoid a financial loss, at the expense of a client;
- 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;
- has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client;
- carries on the same business as the client;
- receives or will receive from another person, other than the client, an inducement in relation to a service provided to the client, in the form of money, goods or services other than the standard commission or fee for that service; and
- receives or will receive from a client an inducement in relation to a service that will be provided or has already been provided, in the form of money, goods or services.
Indicative examples of circumstances, where the provision of investment or ancillary services, by or on behalf the Bank and the Group, constitutes or could give rise to conflicts of interest that could damage one or more clients’ interest are depicted in Appendix 1 .
In general, the Bank and the Group ensure that the appropriate measures and activities are adopted (e.g. Chinese walls) for managing conflict of interests. The procedures, actions and measures are designed to ensure that relevant persons engaged in different business activities involving a conflict of interest, carry on those activities at a level of independence appropriate to the size and activities of the Bank and the Group, and to the materiality of the risk of damage to the interests of the clients. Specifically, the Bank has adopted effective procedures regarding the following:
- to prevent and or limit any person from exercising inappropriate influence over the way in which a relevant person carries out investment or ancillary services or activities;
- to prevent or control the exchange of information between relevant persons engaged in the activities involving a risk of conflict of interest where the exchange of that information may harm the interests of one or more clients;
- the separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of clients, or providing services to clients whose interests may conflict or who otherwise represent different interests that may conflict including the Bank and / or its subsidiaries;
- the removal of any incentives schemes or any direct link between the remuneration of relevant persons principally engaged in one investment activity on behalf of the Bank and/or its subsidiaries and the remuneration of, or revenues generated by different relevant persons principally engaged in another investment activity, where a conflict of interest may arise in relation to those activities;
- to prevent or limit the simultaneous or sequential involvement of a relevant person in separate investment of ancillary services or activities where such involvement may impair the proper management of conflict of interest.
If a staff member detects a potential or actual conflict of interest, he should immediately report the event to the Head of his Business Unit and informs the Compliance Division accordingly. A record of identified conflicts of interests is maintained by the Business Units. The Business Units assess the adequacy of their internal control systems and if these measures and procedures are not sufficient, they inform, if required, the Compliance Division, in order to jointly consider alternative or additional measures and procedures.
In case of potential conflicts of interest, the Bank must inform the client on a timely and adequate manner (see par. VΙ Disclosure to clients).
VI. DISCLOSURE TO CLIENTS
In cases where the Bank determines that the current organizational and operational arrangements that have been established to manage conflicts of interest, at Group level, are not sufficient to ensure, with reasonable confidence, that risks of damage to clients interest will be prevented, the Bank, clearly discloses to the client the general nature and the sources of conflicts of interest, in a durable medium, before undertaking business on his behalf. The disclosure includes sufficient details, taking into account the client’s individual characteristics, to enable him to take an informed decision with respect to the investment service in the context of which the conflict of interest arises.
VII. RECORD OF SERVICES OR ACTIVITIES GIVING RISE TO DETRIMENTAL CONFLICT OF INTEREST
The Bank and the Group’s entities that provide investment services are obliged to keep and regularly update relevant records for every kind of investment or ancillary service or activity carried out by or on behalf of the Bank or / and the Group, in which a conflict of interest entailing a material risk of damage to the interests of one or more clients has arisen, or, in the case of an ongoing service or activity, may arise.
VIII. PRODUCTION AND DISSEMINATION OF INVESTMENT RESEARCH
In cases where the Bank and the Group produce, or arrange for the production of, investment research that is intended or likely to be subsequently disseminated to clients of the Group, or to the public, under their own responsibility, they ensure that all rules stated in paragraph V are adhered by financial analysts involved in the production of the investment research and other relevant persons whose responsibilities or business interests may conflict with the interests of the persons to whom the investment research is disseminated.
This Policy is approved by UBB Executive Directors on 05.06.2009, amended on 26.06.2009 and approved by UBB BoD on 10.03.2010.
APPENDIX Ι
Indicative examples that may cause conflict of interests.
Between Bank and the Group and current / potential client:
- the Bank or / and the Group has information regarding the deterioration of the financial condition of a company and proceeds to transactions related to its financial assets;
- the Bank or / and the Group provides advice to a company for debt issuance and advertises to other clients the advantages and disadvantages of investing to that debt;
- a Bank’s or / and Group’s employee proceeds to multiple (unnecessary / unsolicited) transactions on client’s behalf, in order to gain additional revenues from commissions;
- the Bank or / and the Group represents simultaneously the buyer and the seller in a transaction,
- brokers lead customers to predetermined firms which make special payments (above normal) for large volume of transactions (contingent commissions),
- client puts in a large buy order for Company Y shares, the Bank or/and the Group buys shares in Company Y prior to the order of the client in order to take advantage of price increment,
- the Bank or / and the Group carries on transactions by taking advantage of a favorable recommendation report, which is not disclosed yet from the Research department and the financial analysts,
- a Bank’s or / and Group’s employee has accepted a gift from a client that may affect or could give the impression that affects its independence judgment and integrity,
- the directors of the Bank or / and the Group, participate in BoD and / or Committees of a client’s company(-ies),
- intra-company transactions that may increase book value or create misleading impression on demand,
- a Bank’s or / and Group’s employee buys or sells shares for personal account based on sensitive information held by the Bank,
- financial analyst performs personal transactions which opposite the investment research recommendation report or the investment advice disseminated to the clients,
- employees are incentivized to sell complex products which may not be appropriate for the clients.
Between current or potential clients:
- the Bank or / and the Group advises both the buyer and the seller in an M & A deal,
- the Bank or / and the Group conducts research regarding an entity or a group of companies to which it provides at the same time financial advice,
- clients with material interests which may conflicted,
- orders of specific clients are carried out in priority to other clients’ orders.
