Conflict of Interest Policy

SECTION ONE

1. Introduction

In terms of the Financial Advisory and Intermediary Services Act, 2002, HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES is required to maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conﬂict of interest.

HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES has put in place a policy to safeguard its clients’ interests and ensure fair treatment of clients.

2. Our Objectives

HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES is an authorized ﬁnancial services provider, licensed to provide its clients’ advice and intermediary services on:

Although HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES is licensed for a number of sub-categories, they have elected to specialize and only offer advice and intermediary services in the Short-Term Personal and Short-Term Commercial areas of insurance.

Like any ﬁnancial services provider, HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES is potentially exposed to conﬂicts of interest in relation to various activities. However, the protection of our clients’ interests is our primary concern and so our policy sets out how:

we will identify circumstances which may give rise to actual or potential conﬂicts of interest entailing a material risk of damage to our clients’ interests;
we have established appropriate structures and systems to manage those conﬂicts; and
we will maintain systems in an effort to prevent damage to our clients’ interests through identiﬁed conﬂicts of interest.

3. Conﬂict of interest

HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES
strives towards ensuring it can appropriately and effectively identify and manage potential conﬂicts. It may manage potential conﬂicts through avoidance, establishing conﬁdentiality barriers and by providing appropriate disclosure of the conﬂict to affected clients.

In determining whether there is or may be a conﬂict of interest to which the policy applies, HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES considers whether there is a material risk of damage to the client, taking into account whether HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES or a HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES representative or employee –

Is likely to make a ﬁnancial gain, or avoid a ﬁnancial loss, at the expense of the client;
Has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome;
Has a ﬁnancial or other incentive to favour the interest of another client, group of clients or any other third party over the interests of the client;
Receives or will receive from a person other than the client, an inducement in relation to a service provided to the client in the form of monies, goods or services, other than the legislated commission or reasonable fee for that service.

Our policy defines possible conflicts of interest as, inter alia:

conflicts of interest between HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISK MANAGEMENT SERVICES and the client;
conflicts of interest between our clients if we are acting for different clients and the different interests’ conflict materially;
conflicts of interest where product suppliers, distribution channels or any other third party is involved in the rendering of a financial service to a client;
holding confidential information on clients which, if we would disclose or use, would affect the advice or services provided to clients.

4. Management

Specific monetary measures we focus on:

we may only receive commissions authorized in terms of applicable legislation;
or
fees authorized in terms of applicable legislation, or fees or remuneration for services rendered to a third party, if those fees are reasonably commensurate to the service being rendered; or
fees for the rendering of a service in respect of which commission or fees above is not paid, if those fees are specifically agreed to by a client in writing and may be stopped at discretion of the client; or
a limited immaterial financial interest as defined; or
a financial interest for a consideration or fair value that is reasonably commensurate to the value of the financial interest that is paid by the provider or representative at time of receipt thereof.

We will not offer any financial interest to any representative for –

giving preference to the quantity of business secured for the provider to the
exclusion of quality service;
giving preference to a specific product supplier where more than one supplier
can be recommended to a client;
giving preference to a specific product of a supplier where more than one
product of that supplier can be recommended.

The measures HEREFORD DIRECT (PTY) LTD T/A HEREFORD RISKMANAGEMENT SERVICES have adopted to manage identified conflicts arefurther summarized below. We consider them appropriate to our efforts to takereasonable care that, in relation to each identified potential conflict of interest,we act impartially to avoid a material risk of harming clients’ interests.

Procedures:

We have adopted appropriate procedures throughout our business to managepotential conflict of interest. Our representatives and employees receiveguidance and training in these procedures and they are subject to monitoringand review processes. There are specific measures and consequences in placefor non-compliance with our conflict of interest policy.

Confidentiality barriers:

Our representatives and employees respect the confidentiality of clientinformation and disclose or use it with circumspect. No such information maybe disclosed to a third party without the written consent of a client.

Monitoring:

The manager in charge of the supervision and monitoring of this policy willregularly provide feedback to the management team on all related matters. Thepolicy will be reviewed annually

Disclosure:

Where there is no other way of managing a conflict, or where the measures inplace do not sufficiently protect clients’ interests, the conflict must be disclosedto allow clients to make an informed decision on whether to continue using ourservice in the situation concerned. In all cases, where appropriate and wheredeterminable, the monetary value of non-cash inducements will be disclosed toclients.

Publication:

We will publish our conflict of interest management policy in appropriate mediaand ensure that it is easily accessible for public inspection at all reasonabletimes.

Report:

The provider, compliance officer or key individual will include a report on theconflict of interest management policy in the annual compliance reportsubmitted to the Registrar.

Declining to act:

We may decline to act for a client in cases where we believe the conflict ofinterest cannot be managed in any other way.

SECTION TWO

GIFTS POLICY

In this clause, unless clearly inconsistent with the context of the remainder of this agreement, the words and phrases defined hereunder shall bear the meanings assigned to them in this sub-clause:

1. ‘Benefit includes’ for any tangible, or intangible, gain or promotion, gift, money(whether in cash or transmitted electronically), invitations to sporting or otherevents which require payment to access, vouchers, meals, theatre, musical, travel,or promotional events.

2. ‘Client’ includes any client of the Company or the group.

3. ‘The Company’ means Hereford and the group.

4. ‘Conflict of Interest’ is defined as per the relevant provisions of The FinancialAdvisory and Intermediary Services Act of 2002 read with the Amendment to the General Code of Conduct for Authorised Service Providers and Representatives.

5. ‘Employee’ is the individual who is a signatory hereto.

6. ‘FAIS’ means The Financial Advisory and Intermediary Services Act of 2002.

7. ‘Financial Interest’ / ‘Gift’ includes the acceptance of tangible offerings, rewards,vouchers, trinkets, breakfasts, lunches, dinners, money, sponsorships, andcommissions or any other benefit that is received by an employee in his or herofficial capacity but does not include:

7.1 The company’s own branded property and promotional material;

7.2 Sponsored events and hospitality by the company;

7.3 Official donations and benefits offered by the company;

7.4 Product training and legal training related to the employee’s employment.

7.5 Training that is related to general financial and industry information.

7.6 Training on specialised technological systems that are necessary for theemployee to render a financial service.

8. ‘Gift Register’ means the registry of financial interests and/or gifts receivedby the employee during their employment.

9. ‘The General Code’ is the Amendment to the General Code of Conduct forAuthorised Service Providers and Representatives in terms of The FinancialAdvisory and Intermediary Services Act of 2002.

10. ‘Service Providers’ includes any service provider appointed by the company.

11. It is recorded that:

11.1.1 The company is regulated by FAIS and that the employee is bound to theapplicable provisions as set out in this statute;

11.1.2 The General Code prohibits the employee from receiving a financial interest,or gift, from a service provider or client;

11.1.3 The employee may receive a benefit, financial interest or gift, to themaximum value of R1,000.00 (one thousand Rand) per service provider, orclient, per calendar year;

11.1.4 The employee must take care in accepting a benefit, financial interest orgift as per clause 7. above from a service provider or client in order to avoidbeing placed in a position that may be perceived as showing bias,preferential treatment, creating a conflict of interest or indicatingfavouritism toward any service provider or client;

11.1.5 Benefits, financial interests and gifts must be refused by the employeewhere there is doubt as to the proprietor of said benefit, financial interest orgift.

12. The employee will declare the receipt of any benefit, financial interest or gift in the Gift Registry, which will be held and maintained by the Managing Director, or his dulyauthorised official. A failure to do so will constitute misconduct on the part of theEmployee.

13. It is at the discretion of the Managing Director, or his duly authorised official,whether the employee will retain said benefit, financial interest or gift.

14. The employee cannot approve the retention of received benefits, financial interestsor gifts.

15. An acceptance of a benefit, financial interest or gift recorded in clauses 7.1 – 7.6above will be recorded in a separate register and held by the Managing Director, orhis duly authorised official.