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  • SIO-5.8 Conflict of Interest

    • SIO-5.8.1

      Stablecoin issuers must implement and maintain effective policies and procedures to identify, prevent, manage and disclose conflicts of interest between themselves and:

      (a) their shareholders;
      (b) their senior management & employees;
      (c) their clients; or
      (d) any third-party providing custody and management of reserve assets.
      Added: July 2025

    • SIO-5.8.2

      The conflict of interest policies referred to in Paragraph SIO-5.8.1 must address all such situations which may influence or affect, or which may be perceived to influence or affect, the stablecoin issuer’s ability or the ability of any person connected to the licensee such as its shareholders, board of directors, senior management, employees etc., to take impartial and objective decisions. In particular, the conflict of interest policies and procedures must specifically cover:

      (a) conflicts that may impede the ability of the senior management to take objective and impartial decisions that aim to be in the best interest of the stablecoin issuer without prejudice to the consideration of interests of the clients;
      (b) potential conflict of interest situation that may arise from the management and investment of reserve assets.
      Added: July 2025

    • SIO-5.8.3

      The conflict of interest policies and procedures must, at a minimum include:

      (a) a description of the circumstances which may give rise to a conflict of interest situation particularly with reference to the scenarios referred to in Paragraph SIO-5.8.4 and Paragraph SIO-5.8.6;
      (b) the policies and procedures to be adopted in order to prevent or manage, and disclose, such conflicts. The policies and procedures should differentiate between conflicts of interest that persist and need to be managed permanently and conflicts of interest that occur with regard to a single event for which a one-off measure can be appropriate.
      Added: July 2025

    • Conflict of interest potentially detrimental to the clients

      • SIO-5.8.4

        For the purposes of identifying the types of conflicts of interest that arise in the course of issuing, processing and redeeming approved stablecoins or of investing or managing the reserve assets and whose existence may damage the interests of the clients, stablecoin issuers should take into account, whether the licensee, shareholders, board of directors, senior management, employees and third parties providing custody and management of reserve asset service is in any of the following situations:

        (a) is likely to make a financial gain, avoid a financial loss, or receive another kind of benefit, at the expense of the clients;
        (b) it has an interest in the outcome of an activity carried out to the benefit of the client, including the redemption of the approved stablecoin, which is distinct from the interest of the client.
        Added: July 2025

      • SIO-5.8.5

        For the purposes of identifying the types of conflicts of interest that arises in the course of managing the reserve assets, the stablecoin issuer shall assess whether it receives or will receive an inducement in relation to that activity in the form of monetary or non-monetary benefits or services in a way that may damage the interest of the client.

        Added: July 2025

    • Conflicts of interest potentially detrimental to the stablecoin issuers

      • SIO-5.8.6

        For the purpose of identifying the persons, bodies or entities with conflicting interests, stablecoin issuers should take into account whether that person, body or entity is in any of the following situations:

        (a) it is likely to make a financial gain, or avoid a financial loss, at the expense of the licensee;
        (b) it has an interest in the outcome an activity carried out or a decision taken by the stablecoin issuer, which is distinct from the licensee’s interest in that outcome;
        (c) it carries out the same business as the stablecoin issuer or is a client, consultant, service providers or other supplier of the licensee.
        Added: July 2025

      • SIO-5.8.7

        For the purposes of Paragraph SIO-5.8.6, stablecoin issuers should take into account the following situations or relationships where a shareholder, board of director, senior management, employee and third-party providing custody and management of reserve asset:

        (a) holds shares, tokens (including governance tokens), other ownership rights or membership in that person, body or entity;
        (b) holds debt instruments of or has other debt arrangements with that person, body or entity;
        (c) has any form of contractual arrangements, such as management contracts, service contracts, delegation or outsourcing contract or intellectual property licenses, with that person, body or entity.
        Added: July 2025

    • Remuneration procedures, policies and arrangements

      • SIO-5.8.8

        Stablecoin issuers must within their policies and procedures ensure that remuneration procedures, policies and arrangements:

        (a) do not create a conflict of interest or provide for incentives in the short, medium or long term that may lead the employees or members of the senior management to favour their own interests or the stablecoin issuer’s interests to the potential detriment of any client or shareholders of the licensee.
        (b) identify and appropriately mitigate conflicts of interest potentially caused by the award of variable remuneration, underlying key performance indicators and risk alignment mechanisms, including the pay out of instruments to employees or senior management as part of the variable or fixed remuneration.
        Added: July 2025