07/11/2007
As an asset manager, BNP Paribas Asset Management (“BNPP AM”) may be confronted with conflicts of interest in the normal course of its business. Therefore, BNPP AM needs to manage conflicts of interest, either actual or potential, so as to not abuse such situations and to avoid violating both its obligations to clients and applicable laws and regulations.
A conflict of interest is a situation where, within the course of BNPP AM activities, the interests of BNPP AM and/or its clients or employees compete, whether directly or indirectly.
BNPP AM’s conflicts of interest policy is based on the following :
1) Identifying potential conflicts of interest
2) Pinpointing regulations and procedures to avoid or manage conflicts of interest
3) Establishing and implementing these procedures
4) Creating a register
5) Implementing measures to inform clients when conflicts of interest cannot be avoided
6) Creating a framework for dealing with situations which do not correspond to any of the above
7) Increasing employee awareness and setting up training programmes.
In response to a conflict of interest, BNPP AM (or its employees) can :
- Decline to act, should the situation be highly critical;
- Acknowledge the conflict of interest but prevent any material abuse and protect its client by setting up a permanent arrangement designed to properly manage most situations of conflict of interest, once they have been identified;
- Disclose the conflict of interest or obtain the appropriate client waiver or consent when the conflict of interest cannot be properly managed by the aforementioned provisions. Whatever the situation, disclosure does not exempt BNPP AM from its duty to manage conflicts of interest in order to prevent abuse and to give protection to the client.
Taking into consideration the fiduciary nature of the management service for third parties, BNPP AM attaches the utmost importance in identifying, preventing and managing any conflicts of interest which may arise.