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  • HC-1.2 Corporate Culture and Values

    • HC-1.2.1

      In order to promote a sound corporate culture, the Board must:

      (a) Approve an appropriate code of conduct/ ethics that must outline the acceptable practices that all Board members, senior management and other staff must follow in performing their duties, and the unacceptable practices/ conduct that must be avoided;
      (b) Set and adhere to corporate values that create expectations that the business must be conducted in a legal, professional and ethical manner, and oversee the adherence to such values by Board members, senior management and other employees;
      (c) Promote risk awareness within a strong risk culture, convey the Board’s expectation that it does not support risk-taking beyond the risk appetite and risk limits set by the Board, and that all employees are responsible for ensuring that the licensee operates within the established risk appetite and risk limits;
      (d) Ensure that the corporate values, professional standards and codes of conduct it sets, together with supporting policies, are adequately communicated throughout the licensee; and
      (e) Ensure that all directors, senior management and other staff are aware that appropriate disciplinary or other actions will follow unacceptable behaviour, practices and transgressions.
      Added: July 2023

    • HC-1.2.2

      Employees must be encouraged and be able to communicate, confidentially and without the risk of reprisal, legitimate concerns about illegal, unethical or questionable practices. This must be facilitated through a well communicated and Board approved whistleblowing policy and adequate procedures and processes, consistent with applicable laws. This includes the escalation of material concerns to the CBB.

      Added: July 2023

    • HC-1.2.3

      The Board of the investment firm licensees must:

      (a) Have oversight of the whistleblowing policy mechanism and ensure that senior management addresses legitimate issues that are raised;
      (b) Take responsibility for ensuring that staff who raise concerns are protected from detrimental treatment or reprisals, and that their rights are not undermined;
      (c) Approve and oversee how and by whom legitimate material concerns shall be investigated and addressed such as by an objective and independent internal or external body, senior management and/or the Board itself; and
      (d) Ensure that, after verifying the validity of the allegations, the person responsible for any misconduct is held accountable and is subjected to an appropriate disciplinary measure.
      Added: July 2023

    • HC-1.2.4

      The Board must establish a conflict of interest policy on identifying and managing potential conflicts of interest related to all approved persons. The policy must include:

      (a) An approved person’s duty to:
      i. Avoid, to the extent possible, activities that could create conflicts of interest or the appearance of conflicts of interest. An approved person shall be considered to have a “personal interest” in a transaction with a company if they themselves, or a member of their family (i.e. spouse, father, mother, sons, daughters, brothers or sisters), or another company of which they are a director or controller, are a party to the transaction or have a material financial interest in the transaction or are expected to derive material personal benefit from the transaction (transactions and interests which are de minimis in value should not be included);
      ii. Promptly disclose any matter that may result, or has already resulted, in a conflict of interest;
      iii. Abstain from getting involved in or voting on any matter where they may have a conflict of interest or where their objectivity or ability to properly fulfil duties to the licensee may be otherwise compromised. Any decision to enter into a transaction in which an approved person appears to have a material conflict of interest must be formally and unanimously approved by the entire Board;
      iv. Act with honesty, integrity and care for the best interest of the licensee and its shareholders and other stakeholders;
      v. Not use properties of the licensee for their personal needs;
      vi. Not misuse or misappropriate the licensee’s assets or resources;
      vii. Not disclose confidential information of the licensee or use it for their personal profit or interest;
      viii. Make every practicable effort to arrange their personal and business affairs to avoid a conflict of interest with the licensee;
      ix. Not take business opportunities of the licensee for themselves; and
      x. Not compete in business with the licensee or serve the licensee’s interest in any transaction with a company in which they have a personal interest.
      (b) Examples of where conflict of interest may arise when serving as an approved person;
      (c) A rigorous review and approval process for approved persons to follow before they engage in certain activities (such as serving on another Board) so as to ensure that such activity will not create a conflict of interest;
      (d) Adequate requirements that transactions with related parties must be made on an arm’s length basis;
      (e) Sufficient restrictions on and/or a robust and transparent process for the employment of relatives of approved persons;
      (f) Requirements for properly managing and disclosing conflict of interest that cannot be prevented;
      (g) Requirements for all approved persons to annually declare in writing all their other interests in other enterprises or activities (whether as a shareholder of above 5% of the voting capital of a company, a manager or other form of significant participation) to the Board or a designated Board committee; and
      (h) The way in which the Board will deal with any non-compliance with the policy.
      Added: July 2023

    • HC-1.2.5

      Where there is a potential for conflict of interest, or there is a need for impartiality, the Board must assign a sufficient number of independent Board members capable of exercising independent judgement, to address the conflict.

      Added: July 2023

    • HC-1.2.6

      The CEO/General Manager of the investment firm licensees must disclose to the Board of directors on an annual basis those individuals who are occupying controlled functions and who are relatives of any other approved person within the licensee.

      Added: July 2023