Conflict of Interest Policy

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The Thesis group of firms includes two regulated entities, namely:

Thesis Asset Management plc (TAM), and
Thesis Unit Trust Management Limited (Tutman)

The FSA’s rules (contained in SYSC 10 within the FSA sourcebook) require that Thesis Asset Management plc and Thesis Unit Trust Management Limited (the firms) must be in a position to identify conflicts of interest arising in any of the following situations where the firm is carrying out regulated activities:

  1. it stands to profit or avoid a loss to the detriment of one or more of its clients
  2. the firm has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client's interest in that outcome
  3. the firm has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client
  4. the firm carries on the same business as the client; or
  5. the firm receives or will receive from a person other than the client an inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard commission or fee for that service.

In all such cases, the Compliance Officer will decide what the appropriate action to take is. In no case will the firm involved or any given client be favoured to the detriment of another client and in all instances the conflict of interest will be managed fairly. The appropriate action will consist in the firm(s) taking one or more of the following steps:

  1. disclosing the interest in writing to the client(s) affected
  2. preventing conflicts of interests as defined in SYSC 10.1.3 R from constituting or giving rise to a material risk of damage to the interests of the firm’s clients (the way in which this is done should be recorded and made known to the relevant staff member and client(s)
  3. declining to act for the client(s).

The material and relevant potential conflicts of interest identified by the firms are set out in the table below.

Identified Potential Material Conflicts Procedures and Measures

TAM or Tutman may be the operator or manager/Authorised Corporate Director of, or adviser to, a collective investment scheme, units or shares in which TAM may buy or sell on a client’s behalf. This may increase revenues within the Thesis group.

Tutman may operate or manage collective investment schemes which may contain investments which TAM may wish to invest in for its clients.

TAM investment managers may make use, in order to benefit TAM’s investment process, of the “intellectual property” of asset allocation, investment selection and trade timings to which the Thesis group has access through Tutman’s appointment of external investment advisers.

Thesis funds are purchased for clients only on their investment merits and in accordance with the client’s investment management agreement.

No double charging takes place where such funds are purchased.

Where an external adviser is appointed to the Tutman collective scheme, no TAM investment manager will have access to or influence over the investment decisions taken on behalf of that scheme.

Investment decisions are collectively taken for TAM by a range of investment committees in line with a range of predetermined investment models. No individual manager can orient such decisions on the basis of information gleaned from external advisers.

Access to information about external advisers’ portfolios and strategies is confined to those managers directly involved with Tutman (the Managing Director in practice). The Managing Director does not sit on any investment committee and does not influence the committees’ decisions.

TAM may receive a commission from the manager of a collective investment scheme in which TAM may invest on a client's behalf.

Investment in a third party fund is made strictly on its investment merits and independently of any consequential revenue benefit.

Staff of TAM or Tutman may purchase or sell for their personal account securities which TAM may buy or sell on a client's behalf.

Rigorous personal account dealing policies and procedures apply to all Thesis directors and staff; these are detailed in the firm’s compliance manual.

Staff of TAM or Tutman may receive inducements from the issuer of a security or the manager of a collective investment scheme in which TAM may invest on a client's behalf.

Procedures are in place concerning the acceptance of inducements which apply to all Thesis staff. These procedures include the maintenance of a comprehensive gifts and entertainment record.

Fund managers may undertake excessive turnover of holdings in clients’ portfolios in order to generate higher levels of commission for TAM.

Portfolio activity levels are independently monitored.

Thesis operates a comprehensive inducements policy as outlined above.