HC-1.2.4
The Board must establish a conflict of interest policy on identifying and managing potential conflicts of interest related to all
(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 person s 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 person s;
(f) Requirements for properly managing and disclosing conflict of interest that cannot be prevented;
(g) Requirements for all approved person s 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: April 2023