HC-2.2.1

The Board and its members must act with honesty, integrity, due skill and care, and in the best interests of the licensee, its shareholders and clients.

HC-2.2.2

In assessing compliance with Paragraph HC-2.2.1, the CBB will take into account all actions of the Board and its members. The interest of the licensee includes the licensee's continued compliance with all relevant rules and regulations, and the interests of employees, clients and other stakeholders. The interest of shareholders includes the current and future value of the licensee, its status as a going concern, transparency and disclosure of information to the market. The interest of clients includes ensuring that the licensee fulfils its obligations under its terms of business and treats all clients fairly and pays equal regard to the interests of all clients.

HC-2.2.3

Each member of the board must understand that under the Company Law he is personally accountable to the investment firm licensee and the shareholders if he violates his legal duty of loyalty to the investment firm licensee, and that he can be personally sued by the investment firm licensee or the shareholders for such violations.

HC-2.2.4

An investment firm licensee's Board must establish and disseminate to all employees of the licensee a corporate code of conduct.

HC-2.2.5

The code of conduct must establish standards by giving examples or expectations as regards:

HC-2.2.6

The Board must establish and disseminate to employees policies and processes for the identification, reporting and prevention or management of potential conflicts of interest, including matters such as:

HC-2.2.7

Any transaction in which Board members or any member of management have potential conflicts of interest should either be proscribed or require formal documented approval by the Board, with measures taken to manage those conflicts (see also Paragraph HC-2.4.1).

HC-2.2.8

The Board must ensure that policies and procedures are in place to ensure that necessary customer confidentiality is maintained.

HC-2.2.9

The duty of loyalty includes a duty not to use property of the investment firm licensee for his personal needs as though it was his own property, not to disclose confidential information of the investment firm licensee or use it for his personal profit, not to take business opportunities of the investment firm licensee for himself, not to compete in business with the investment firm licensee, and to serve the investment firm licensee's interest in any transactions with the company in which he has a personal interest.

HC-2.2.10

For purposes of Paragraph HC-2.2.9, an approved person should be considered to have a "personal interest" in a transaction with the company if:

is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minimis in value should not be included.)