Conflicts Management

Introduction

This statement sets out the organisational and administrative measures adopted by Brandon Hill Capital Limited to ensure the objectivity and impartiality of its investment research. It is produced in accordance with the rules of the UK's Financial Conduct Authority and relevant international regulatory standards. It applies to all types of investment on which research is produced. 

This statement has been prepared for information purposes for the firm's clients and other interested parties. It is supported by more detailed internal policies and procedures with which all staff are required to comply. It forms part of Brandon Hill Capital Limited's conflicts of interest policy. 

Nature of Brandon Hill Capital Limited's Investment Research

Brandon Hill Capital Limited produces research for the benefit of the firm's institutional investment clients only.  

All Brandon Hill Capital Limited's research is designed to be objective and impartial. It is based upon analysis and is intended to be fair, clear and not misleading but it will not necessarily be a complete description of the subject companies or securities.

Research may be disseminated in a number of formats and by a number of means, orally, in writing, by e-mail, via the firm's extranet and by third party service providers, but it will always be identified as Brandon Hill Capital Limited investment research to distinguish it from other communications to institutional clients, such as sales notes. 

Research is produced exclusively in our office in London.  

The Analyst's Role

It is the role of the analyst to produce informed commentary on the companies under his or her coverage to assist institutional investors assess their investment merits. 

Each analyst's primary responsibility is to the firm's investment clients. Research is not produced to inform proprietary trading decisions. It is the role of the firm's sales team to draw clients' attention to analysts' research and to communicate the substance of that research to them. Analysts are encouraged to communicate freely with the sales team. 

Analysts are required at all times to observe high standards of integrity and ethical behaviour and to have a reasonable and considered basis for their conclusions and recommendations. 

Conflicts of Interest

In common with all integrated investment firms, conflicts of interest may arise within Brandon Hill Capital Limited which have the potential to influence the impartiality of research. The two main areas of conflict are between research and the firm's corporate finance activities and between research and proprietary trading.

Brandon Hill Capital Limited aims to maintain research coverage on all companies to which the firm acts as a corporate broker or financial adviser in the UK. Analysts are expected to apply the same standards and approach to all companies regardless of any corporate relationship. 

To ensure equality of treatment, any new piece of research or significant change to an estimate or recommendation must be disseminated to clients and the sales team simultaneously, and clients allowed a reasonable time to react. A trader or salesperson who for any reason becomes aware of any such publication or change before it has been disseminated to the market is prohibited from communicating the substance of the publication or change to any person outside Brandon Hill Capital Limited, until dissemination to clients has taken place. 

Research is disseminated to clients through established distribution channels described above. On occasion the group of recipients will be tailored in line with Brandon Hill Capital Limited's perception of the class of those who will be interested in its contents, or for reasons related to securities laws in the jurisdiction of the recipient, so that not all clients will receive it. When research is disseminated in hard copy only, distribution is sometimes staggered so that some clients will receive it before others; however this typically only applies where the securities to which the research relates are not yet publicly traded, and therefore Brandon Hill Capital Limited does not expect any client to be prejudiced. 

The majority of the business executed by Brandon Hill Capital Limited's broking departments is client driven. However, the firm does make a market in some UK investment trusts and some UK smaller companies. The firm may also take proprietary positions to execute client business or in the course of a distribution of securities on behalf of a corporate issuer or in the secondary market. Procedures are in place to ensure that analysts do not have knowledge of any proprietary position in order to prevent this knowledge from influencing their views. Equally, market makers are prohibited from having advance knowledge of the timing or content of research publication in order to prevent them taking advantage of this information ahead of the firm's clients. 

Measures to ensure Analysts' Independence 

Brandon Hill Capital Limited has longstanding arrangements in place to ensure the independence and objectivity of its research. These include: 

Chinese Walls

Chinese walls are arrangements which restrict or prevent the flow of information between one area of the firm and another. These arrangements may include restrictions on physical access, restrictions on access to information held on computer systems or in hard copy files and written policies and procedures. The effectiveness of the firm's Chinese walls is regularly monitored by the compliance department. 

The firm's corporate finance department is rigorously protected by Chinese walls. Only corporate finance personnel and senior members of certain central functions are granted both physical access and access to information contained within the corporate finance department. Corporate finance personnel may not divulge confidential price sensitive information to analysts without the express prior permission of the compliance department and the Head of Research. Permission will only be granted where the compliance department is satisfied that it is in the interests of the corporate client for disclosure to be made, that the analyst's independence is not compromised and that there is little risk of the information becoming more widely known.

Analysts may, if they so choose, allow corporate finance personnel to see research in draft prior to publication, provided no recommendation or price target (or text amounting to the same) is contained in the draft. The relevant corporate finance executive may only comment on factual accuracy and may not seek to influence the analyst's views or recommendation. Draft research may only be passed to subject companies for comment on the same basis. At the time of share offerings, draft research may also be shared with the bookrunners of the offering and their legal advisers on this basis and for checking against applicable legal restrictions. 

Any analyst who feels any attempt has been made to influence his or her independence is expected to report the matter immediately to senior management and the compliance department. 

In general, access to Brandon Hill Capital Limited's trading floor is unrestricted during business hours but sensitive information, particularly any proprietary position the firm may have and the identity of clients for whom business is being transacted, is protected. Analysts do not have desks in the corporate finance department or on the trading floor.

A Chinese wall also operates between Brandon Hill Capital Limited's research department and all businesses of Brandon Hill Capital Limited. 

Management and Supervision Arrangements

The Equities Division operates as an independently managed department. The Head of Research reports directly to the firm's Chief Executive. Analysts do not report to, and are not supervised by, personnel in any other department, including corporate finance.

Decisions on research coverage and the content and timing of research are made solely by the management of the research department in consultation with the CEO. In making such decisions, research department management may consider input from various sources, including the firm's sales team and directly from investment clients themselves. As previously mentioned, coverage is generally maintained on the companies with which the firm has a corporate relationship. Research coverage, content and timing may, from time to time, be influenced by legal or regulatory requirements. Where research is published in response to the announcement of a securities offering in which the firm is involved as bookrunner, manager or broker, the timing of publication will typically be dictated by the timing of the offering, which is in turn dictated in part by the corporate finance department. 

Analysts' Remuneration

Analysts have no business responsibilities other than to research the companies they follow and to communicate the results of their analysis both externally to clients and internally to the firm's sales and execution teams. Analysts do not become involved in any of the firm's other business activities, including proprietary trading or, except to the limited extent described below, in corporate finance business. It follows from this that analysts' remuneration is determined solely by the management of the research department in consultation with the CEO. 

In common with all members of the firm, analysts' remuneration consists of an annual salary together with bonuses based on both the firm's profitability and the individual's performance. Factors which may be taken into account when determining remuneration include the individual's productivity and performance, the overall quality of their research, seniority and experience, evaluation from the firm's institutional clients and the sales team, and the firm's overall performance and profitability. No analyst is remunerated on the basis of involvement in any particular transaction or for any particular piece of work. 

Personal Account Dealing

No analyst is permitted to deal for his or her own account, or that of his or her immediate family, in any securities of the companies they follow or any company in his or her sector. New analysts must disclose any pre-existing holdings to the firm's compliance department.

Analysts are not permitted to hold directorships or management positions or to receive any remuneration from companies they follow. 

In common with all other members of the firm, analysts are also prohibited from accepting any gift or inducement which could call into question their integrity or independence. This does not preclude acceptance of reasonable corporate hospitality and gifts of minor value in common with the firm's general policies on gifts and hospitality. Analysts are prohibited from promising issuers of securities favourable research coverage. 

Restricted Activities

Analysts do not attend meetings with corporate finance personnel at which investment banking business is being sought, generally referred to as "pitches". However, they will meet the management of companies, including corporate clients, separately in the normal performance of their duties. 

In order to preserve their independence, analysts are not directly involved in corporate finance transactions. Subject to certain controls, including obtaining permission from the compliance department and the Head of Research, they may provide some limited services to the firm's corporate finance department in order to utilise their specialist knowledge. Such services may include researching business opportunities, assisting in due diligence, advising on market sentiment and providing industry or sector knowledge. 

Analysts typically do not participate in the marketing of corporate transactions such as IPOs and secondary fundraisings. They may however produce research from an independent perspective on companies involved in a transaction. They may meet institutional clients and provide briefing for the firm's sales team during the course of a transaction. They may also be involved in and attend companies' periodic investor relations roadshows which are unconnected with corporate transactions in which corporate finance personnel are involved.

For legal or regulatory reasons and in accordance with general market practice, the firm may be required to observe a "blackout" period before, during or after a transaction. Typically, this will occur where the firm is involved in an initial public offering of shares or where the firm is acting for one of the parties in a takeover which is subject to the UK Takeover Code. Even if not subject to a complete blackout, the content of research may be restricted in such circumstances. Brandon Hill Capital Limited's general approach is, however, not to restrict research at the time of an offering of shares by a listed company or a takeover to which the UK Takeover Code does not apply, except to the extent required by law (or market practice deriving by analogy from legal restrictions). The final decision about whether restrictions should apply will be taken by the compliance department in consultation with legal advisers where appropriate. 

Disclosure

Disclosure is made on research reports of a number of areas where conflict of interest may be perceived. Disclosures include (where relevant) that the firm has a corporate relationship with the subject company or has received compensation for corporate finance activities in the past 12 months or may seek such compensation in the future; that Brandon Hill Capital Limited is a market maker in the stock or that the firm has a proprietary position of more than 1% of the company's shares. Additionally, the relevant analyst certifies that the views expressed in their research accurately reflect their personal views about any or all of the investments to which the report relates and that no part of their compensation was, is, or will be directly or indirectly, related to the specific recommendations or views contained in the report. 

Relationship with Brandon Hill Capital Limited

This document is issued by Brandon Hill Capital Limited, an independently managed company which issues research under the brand Brandon Hill Capital Limited. Decisions on all the issues covered by this Policy are made entirely by the management of Brandon Hill Capital Limited and not by any other company.

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