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Conflicts Policy
1. Introduction
Proplend is responsible for taking all reasonable steps to identify and manage any conflicts of interest in their business that might arise, in particular in relation to the operation of the Service. Capitalised terms in this policy that are not otherwise defined where they appear have the meaning given to them in the Members’ Agreement. We are obliged to maintain and operate arrangements to prevent any conflict from giving rise to a material damage to the interests of Members.
We must also establish, implement and maintain an effective conflicts of interest policy. This document is our conflicts of interest policy (“Conflicts Policy”) in so far as it applies to the operation of the Service. We are committed to maintaining the highest of ethical standards and complying fully with our regulatory and legal obligations. Compliance with this Conflicts Policy is a requirement of the employment contract of every employee and any breach may lead to disciplinary proceedings, up to and including dismissal.
2. Identification of Potential or Actual Conflicts
A conflict of interest may arise where either of us, or any of our employees, directors, outsource service providers or any person linked by control to either of us (“relevant person”) is providing a service to Members, or engaging in activities on their own account, which may entail a material risk of damage to Members’ interests, for example where either of us or any relevant person:
- could make a financial gain, or avoid a financial loss, at the expense of a Member;
- has an interest in the outcome of a service provided to the Member or of a transaction carried out an behalf of the Member, which is distinct from the Member’s interest in that outcome;
- has a financial or other incentive to favour the interest of one Member, or group of Members, over the interests of another Member;
- receives or will receive from a person other than the Member, an inducement in relation to a service provided to the Member, in the form of monies, goods or services, other than the standard commission or fee for that service.
3. Actual or potential conflicts of interests we have identified
Because of the nature of the Service, we are providing services to both Borrowers and Lenders. We charge Borrowers an ‘Arrangement Fee’ and Lenders a ‘Lender Fee’. If Lenders use the Proplend Loan Exchange, they’ll also be subject to an Assignment Fee. Our rights and obligations in relation to such fees are as set out in the Members’ Agreement which also sets out the extent of our obligations to both Borrowers and Lenders. We may also share payments received or make payments to third parties for introducing Members to us. We will make appropriate disclosure of such arrangements in the rules applicable to any related promotions or otherwise on request.
4. Gifts and Entertainment
Employees receiving gifts and hospitality can lead to potential conflicts of interest, that could influence decision-making and behaviour. It’s rare for Proplend employees to be offered gifts and entertainment from anyone but relatively more likely when dealing with professional advisers, as opposed to lenders or borrowers. Proplend operates a strict gifts and entertainment policy to ensure that any offers received are declared by employees before acceptance and are of only modest value to avoid undue influence.
5. Employees
A conflict of interest may arise where an employee has a direct or indirect interest in a transaction. This may include where the employee has a connection with the other party to the transaction or where the employee’s family has such a connection – in particular a connection with a Member. A connection may include being a director or having a significant shareholding or being an employee or consultant to any Member. Employees are required to disclose any connection which could, or could be seen to have the effect of compromising the judgment of any employees. Employees are required to notify us of any material interests of this kind that they may have.
6. Managing Conflicts of Interest and Disclosure
We shall use all reasonable efforts to manage any conflict of interest. If we believe there is still a significant risk of damage to Members we will consider appropriate disclosure. We will maintain appropriate policies and procedures as well as training to ensure employees identify circumstances which give rise to a potential conflict of interest and to enable them to manage such conflicts. We will monitor conflicts which arise.
7. Further Information
We will review and update this Conflicts Policy as necessary. Questions regarding this policy should be emailed to [email protected].