1. Introduction
Arete Research Services LLP ("Arete", "the Firm") is a firm regulated by the FCA. Arete's main business is to provide independent research services to professional clients and eligible counterparties.
2. General Principles
At all times, Arete and its staff (employees and partners) aims to act in the best interests of our clients and treat them fairly. Services rendered by Arete aim to be objective and unaffected by conflicts of interest ("Conflicts"), those of either Arete or the individuals employed by Arete and not provided in a manner that advances one client's interests ahead of another's.
Arete staff do not aim to put their own or the Firm's interests ahead of those of their clients. Arete has standard procedures for the prevention, identification, mitigation, escalation and management of Conflicts as they arise in the normal course of business. These controls are designed to address actual or potential Conflicts. If competing interests are identified, the situation is evaluated, escalated, and resolved by Compliance or the Board.
3. Conflicts of Interest
Arete aims to identify and prevent or manage Conflicts. A Conflict may arise:
- • where our interests' conflict with those of a client;
- • where the interests of one of our clients' conflicts with those of another client;
- • where the interest of one team or product conflicts with those of another;
- • in relation to an employee and a potential third-party service provider to Arete; or
- • where the interests of one of our members of staff conflicts with those of a client or Arete.
Importantly, a Conflict under this Policy includes circumstances where:
- • an actual Conflict has arisen;
- • a potential Conflict may arise; or
- • a situation arises that may give rise to the perception of a Conflict (even where a Conflict may not actually yet exist).
4. Management of Conflicts
Arete takes responsibility for preventing or managing Conflicts arising in its business. We maintain and operate effective organisational and administrative arrangements. These cover:
4.1 PA Dealing
All staff (and their dependents) require preapproval before executing transactions in covered listed securities for their own account. Employees are also required to notify Compliance before executing transactions in the securities of a private company. Where an analyst wishes to trade in a company that is in the same sector as a covered company, approval must also be sought. All personal account positions are declared prior to joining.
4.2 Gifts, Inducements and Entertaining
Employees are not permitted to accept any gifts, inducements or entertainment that might influence their impartiality. Gifts and entertainment above certain thresholds are subject to approval by the Finance team.
4.3 Remuneration
Arete's remuneration policy includes measures to avoid Conflicts. The level of pay and bonuses/profit share are subject to many factors, and this is overseen by the Arete Board.
4.4 External Activities
Employment or the acceptance of directorships and certain other outside business interests outside of Arete by our staff are subject to approval of the Board. This would not be granted in the event of any Conflicts arising that cannot be managed or mitigated. All external activities are declared prior to joining.
4.5 Alpha Capture and Sentiment Systems
Some of our staff contribute trade ideas to third-party Alpha Capture Systems. Such ideas are the sole responsibility of the individual and they may, from time to time, express a view contrary to that of our existing published research. Analysts are not permitted to contribute to these systems. Analysts are, however, permitted to contribute to sentiment systems where the expressed sentiment is in line with our general communication with clients.
5. Research
In addition to the Conflicts mentioned in Sections 4, the following are relevant to research analysts in dealing with Conflicts:
- • Analysts are solely responsible for their investment views.
- • If an analyst chooses to send a copy of their draft written research to a subject company prior to publication, they remove any Rating and/or Price Target and make it clear that the company is only being asked to confirm the report's factual accuracy and not to comment on the analyst's views or conclusions. Analysts are under no obligation to make changes to research following company feedback, although any comments suggesting factual inaccuracies are thoroughly investigated.
- • Arete Access relies on good relationships with some covered companies. However, the objectivity of our research opinions takes priority over such relationships and our analysts are required to be objective, even if this risks damaging the relationship for Arete Access.
- • An analyst's main activity is the preparation and dissemination of investment research, which includes conveying their views directly to our clients.
- • We distribute our written research to our clients by publishing it via our distribution platform and on our website.
6. Disclosure
Arete discloses actual, potential, or perceived Conflicts to third parties where required by law or regulation. The disclosure of a Conflict does not exempt us from the obligation to maintain and operate effective organisational and administrative arrangements to manage the Conflict.
7. Register
In accordance with FCA Rules, we maintain a record of Conflicts and the actions taken to manage those Conflicts.
8. Review of Conflicts of Interest Policy
This Conflicts of Interest Policy is reviewed periodically.
'06 March 2025