Policy for the prevention and management of conflicts of interest
Amundi PEF is likely to be confronted with situations where the interests of a client may be in conflict with those of another client, or the interests of Amundi PEF, or even situations where the interests of Amundi PEF’s clients may be in conflict with those of one of its employees.
In order to ensure the protection and primacy of clients’ interests and to comply with applicable regulations, Amundi PEF has implemented a policy and procedures designed to prevent situations giving rise to a conflict of interest and to address these, where appropriate.
This document is designed to present Amundi PEF’s approach in terms of the identification, prevention and management of conflicts of interest which could arise during the exercise of its activities. More detailed information is available on request.
What is a conflict of interests?
Generally speaking, a conflict is likely to exist whenever a situation arises in which the interests of a client may be impaired. The three categories of potential conflicts are as follows: a) conflicts involving multiple clients, for example if Amundi PEF, offering its services to two clients, favoured one of the two by processing their transactions on a priority basis;
(b) those involving clients and Amundi PEF, its service providers, delegatees and any company affiliated with Amundi PEF by a controlling relationship, for example if Amundi PEF offered a service that would be more profitable to it at the expense of clients’ interests;
(c) those involving clients and employees of Amundi PEF, for example if the employees were to conduct transactions on their own account, or generate a direct or indirect financial benefit using proprietary information about equity interests, clients, or portfolios.
Which measures has Amundi PEF taken to identify conflicts of interest?
Preventively, Amundi PEF is implementing specific procedures, notably a regular review of activities and specific transactions.
To this end, in accordance with the regulations in force, Amundi PEF has developed a mapping of the different situations of potential conflict of interest in its activities, which might affect the interests of clients because one of the players concerned:
is likely to make a financial gain, or avoid a financial loss, at the expense of the client;
has an interest in the outcome of a service provided to the client or a transaction carried out on behalf of the client that is different from the client’s interest in the outcome;
is prompted for financial or other reasons to favour the interests of another client (or group of clients) over the interests of the client to whom the service is provided;
carries out the same professional activity as that of the client;
receives or will receive from a person other than the client an advantage in relation to the service provided to the client, in any form whatsoever, other than the commission or fees normally charged for this service.
This risk mapping is updated periodically, at least once per year, to integrate the developments and changes in Amundi PEF’s activities. This allows Amundi PEF to ensure that organisational or procedural provisions are implemented to prevent or manage potential conflicts of interest, that checks are carried out and that their results are satisfactory.
This mapping notably covers:
a) conflicts of interest between Amundi PEF and other entities of the Crédit Agricole group concerning:
l’activité de capital investissement (prise de participation, co-investissement, gestion de portefeuilles) versus les autres activités bancaires ou de capital investissement d'autres entités du groupe crédit agricole,
b) conflicts of interest between the various activities carried out by Amundi PEF concerning direct fund management :
the management of funds of funds in development or secondary market projects likely to concern the same interests and that may have a different impact on several funds: “Wall of China” principle (separation of duties, compensation and staff code of conduct)
c) conflicts of interest between Amundi PEF, its service providers, its clients–subscribers, its shareholders or co-investors concerning:
independence from third-party shareholders or clients in the conduct of activities (selection of providers, intermediaries, investment choices, participation in the boards of companies)
a choice of service providers (delegatees, lawyers, etc.) without holding a tender procedure or under unusual market conditions
direct fund management, the management of funds of funds exercised in the interest of investors (rule for allocating interests taken in the various portfolios, rules in the case of divestiture of interests)
the choice of counterparties for the placing of orders on listed companies without taking account of the best execution objective
direct and indirect remunerations received by Amundi PEF (transparency of information and remuneration)
e) conflict of interest between Amundi PEF and its employees concerning:
personal transactions generating a financial gain on investments (investment in managed portfolios, carried interest)
the exercise of several activities or external mandates with direct financial interests in companies in which Amundi PEF invests, which, moreover, may be in competition
the use of confidential information obtained in the context of the investment activity
the benefits received from companies in which Amundi PEF invests, from co-investors, clients or service providers that could lead to them being treated preferentially
Amundi PEF also implements procedures for employees to report any potential or proven conflict of interest situation.
Which measures have been taken to prevent and manage conflicts?
Amundi PEF implements an organisational structure and procedures to prevent conflicts of interest and to manage proven cases of conflict.
Amundi PEF has an organisational structure that separates, right up to the level of General Management, “risky” functions with respect to conflicts of interest. The direct fund and fund of fund management teams, the valuation teams (outsourced) and marketing network support teams are therefore clearly separated.
The control functions (Compliance, Risk) enjoy full independence and report directly to the General Management of Amundi PEF and through a business line structure at the level of the Amundi group. They continuously monitor of the activities carried out in order to ensure that internal control procedures are appropriate.
Care is also taken to ensure the “physical” separateness (secure access to the premises) and security of confidential information held, via clearance procedures limiting access to the people who need it to carry out their professional activity.
Procedures and control
The measures and controls adopted are adapted to the prevention and management of conflicts of interest and notably include the following provisions:
an internal policy to manage conflicts of interest, including instructions that employees must follow in order to identify, prevent and manage conflicts of interest;
In its compliance regulation, Amundi PEF has enacted rules relating to co-investments and complementary investments in accordance with the principles laid down by the French Association of Investors for Growth (Association Française des investisseurs pour la Croissance - AFIC) and by the French Asset Management Association (Association Française de la Gestion Financière - AFG).
These internal regulations and their appendices relating to the code of conduct, supplemented by many targeted application procedures, provide a framework to the risk that staff of Amundi PEF might take advantage of information held, at the expense of clients, or act on the basis of interests which might be contrary to those of clients (procedures for managing employees’ personal transactions, declaration of gifts and benefits received, declaration of outside activities or social mandates for consideration of their compatibility with the activity exercised within Amundi PEF).
strict procedures and rules to guide decisions regarding investment, divestment or the transfer of equity interests, their distribution in the portfolios, order processing, in compliance with the primacy of the client’s interests;
Amundi PEF complies strictly with the operating rules of the financial markets and is prohibited from any infringement of the equal treatment of orders.
In particular, the orders sent in the market are pre-assigned and time-stamped, and Amundi PEF does not accept subscription or redemption orders transmitted by clients beyond the cut-off time for centralisation.
strict procedures and rules for the selection and remuneration of intermediaries; the choice of providers or delegatees is rigorously regulated, with a call for tender process and an analysis of the price/quality ratio, in compliance with the principle of the primacy of the client’s interests. The final decision rests with the General Management of Amundi PEF.
internal committees (investment or divestment committees, New Activities/New Products committees, Risk and Compliance committees) or those which fall within the scope of the Board of Directors (Audit, Compensation) that fully integrate aspects of the code of conduct in their decisions;
an adapted training programme for the employees concerned in order to ensure they have satisfactory knowledge of their responsibilities and obligations.
What are the measures taken to manage proven conflict of interest situations?
It is possible that in certain specific or complex cases, Amundi PEF may consider that the organisational and administrative provisions taken are not sufficient to ensure, with reasonable certainty, that the risk of prejudice to clients’ interests be avoided. In such a case, Amundi PEF clearly informs the clients (or third-party partners) of the general nature and source of these conflicts of interest before acting on their behalf. The client (or third-party partners) thus notified will make an informed decision on the provision of the investment service.
The Risk and Compliance committee, whose permanent members include all the chief executives of Amundi PEF as well as the Head of Compliance and the Head of Risk of Amundi Group, is empowered to handle these exceptional situations and make the necessary decisions for informing the client.
Any service or activity of Amundi PEF in connection with which a conflict of interest involving a significant risk of damage to the interests of one or more clients has occurred or is likely to occur will be recorded in the register of Amundi PEF which lists all situations of this kind.
Complaint handling policy
Amundi PEF has established a system to handle client complaints in an effective, transparent and consistent manner, in accordance with applicable regulations.
This feature applies to all clients regardless of their category.
Definition of complaint
A complaint is defined as the expression, in writing or received by any traceable way, of the client’s dissatisfaction concerning the provision of a service or an investment service.
Amundi PEF’s processing of complaints
Amundi PEF undertakes to handle any client complaint according to the following principles:
transparency with regard to the client
free access to the complaint processing system
appropriate processing time in view of the complexity of the complaint.
For each complaint, Amundi PEF will communicate to the client the deadline within which it undertakes to provide a response (from 10 business days to 2 months at most, barring any duly justified special circumstances). In the event of a complex resolution resulting in this deadline being exceeded, the client will be promptly notified.
The communication sent by the client must clearly indicate that it is a complaint.
The complaint must be sent by post or e-mail to the client’s usual contact person, such as:
the adviser at the bank branch where the client has their account, or
the distributor with whom the unitholder holds their assets, or
Amundi PEF’s after-sales service which is in direct contact with the client:
Mediation by the French financial markets authority (Autorité des Marchés Financiers - AMF) If a client is not satisfied with the response to their complaint, they may have recourse to a mediator. To do so, they may apply by post to the mediator of the AMF at the following address:
Médiateur de l'AMF
Autorité des marchés financiers
17 place de la Bourse 75082 PARIS CEDEX 02