Conflicts of interests

Conflicts of interests

Introduction
This note summarizes Quintet Private Bank’s (Quintet) measures for compliance with the requirements under Article 20 of the Market Abuse Regulation in the European Union as well as those set out by the Financial Conduct Authority (the "FCA") in relation to the correct identification and management of conflicts of interest resulting from the production and dissemination of investment recommendations.

Whilst this note refers and covers all Quintet entities it must be highlighted that investment research in the UK is distributed by Brown Shipley & Co (BSCo), a fully owned subsidiary of Quintet, whose policies in relation to the production and distribution of investment research replicate those applicable to the rest of the group.

Similarly, Quintet is bound by Swiss Banking’s Directives on the Independence of Financial Research.

Quintet’s policies in this area follow the highest regulatory standards in force in the different regulatory environments in which it operates.

Production and distribution of investment research by Quintet

A limited number of individuals within Quintet’s Investment Office are appointed by the Chief Investment Officer, based on their capabilities, technical knowledge, research skills and experience to produce independent research.

Quintet also receives independent research from third parties which can be distributed in accordance with the terms of their licence. 

Conflicts of Interests

The production and dissemination of investment research can result in conflicts of interest between Quintet and its clients. The following summarises measures adopted to ensure these conflicts of interests are adequately managed.

Payments

Costs related to the production and dissemination of independent research are borne by Quintet, whether it is produced internally or commissioned to third party supplier, rather than via trading activity or commissions. 

Remuneration

Our analysts do not have any aspect of their remuneration linked to any trading activities or commissions from trading.

Conflicting activities

Our analysts are not permitted to carry out any other role within Quintet that may impair the impartiality of their research, (including, but not limited to portfolio management decision-making or advising clients) or make use of research information not widely available to allowed recipients of independent research.

Analysts are subject to a two-week period trading ban in relation to shares of companies with whom they have had meetings or conversations but about whom they have not written.  

In order to prevent our analysts from being, or being perceived to be, influenced by their outside business interests, they must refer and adhere to Quintet policies in place surrounding outside activities.

An analyst is not allowed to serve as an officer, director, employee or advisor to a company in the sector/industry which he covers.

Personal account dealing

Our analysts are not allowed to carry out personal transactions in financial instruments to which the investment research relates:

  1. as long as the timing and the content of the investment research is not publicly available.
  2. contrary to the current recommendations, except in exceptional cases with the prior written approval of the compliance function. 

Inducements

Our analysts are prohibited from:

  1. Agreeing to provide favourable research on any on any company or security, nor to make or change any particular recommendation. 
  2. Soliciting or accepting any inducement to publish or change any opinion or recommendation or from offering, soliciting or accepting any inducement or incentive for the provision of favourable research. 

Information barriers 

Quintet has put in place digital information barriers to regulate the unauthorised flow of inside information between analysts involved in the production of research and those colleagues involved in portfolio management or in advising clients. 

Under no circumstance may any form of digital or verbal communication from research analysts to any person outside their research team be used to disguise an unauthorised leak or investment research prior to its release in accordance with Quintet’s policy in this area. 

Information barriers and procedures are also in place between the research analysts and staff involved in securities trading for the account of Quintet or clients to ensure that price sensitive information is handled according to applicable laws and regulations. It is Quintet’s policy not to disclose the rating to the issuer before publication and dissemination.

Release process and timing

Release of investment research is coordinated across the Group to ensure that research notes are made available to all potential recipients at the same time, subject to any IT system or other restrictions/constraints beyond the control of Quintet.

Under no circumstances can a research note be distributed whether internally or internally to one or more recipients before it is made publicly available to the rest of allowed recipients.   

Disclosure of Conflict of Interests

Quintet will disclose conflicts of interests that by their own nature cannot be mitigated. 

Current conflict of interests disclosures: none

Examples of disclosures where applicable: 

An analyst may never provide research or a recommendation relating directly or indirectly to a financial instrument or an issuer when he holds information on this issuer or a relationship that may reasonably be expected to impair the objectivity of the research or recommendation.

Definitions in Quintet Research Notes

Quintet uses the ratings 'Overweight', 'Neutral' and 'Underweight'. These ratings are defined as follows:

Quintet intends to review its target prices at least every 180 days. Under circumstances where the market price of a stock deviates from the published target price by more than 25%, this will provide a catalyst to review the investment thesis and target price as soon as is practical.

Quintet uses the ratings 'Under review', 'Not rated' and 'Restricted'. These ratings are defined as follows:

This document has been composed by Quintet Private Bank (Europe) S.A. (“Quintet”). Quintet has its registered office in Luxembourg (RCS B6.395) and is supervised by the CSSF (Commission de Surveillance du Secteur Financier) and the ECB (European Central Bank). 

The information contained in this document may not be regarded as personal advice: you should consult your own advisor as to whether the financial instruments to which this document relates are suitable for you and/or whether they correspond with your (intended) risk profile. Investing involves risks and the value of investments may go up or down. Past performance is no indication of future performance. 

The analysts mentioned in this document, declare that (i) opinions, views and outlooks in this report reflect their personal views, (ii) the information in this document is based on publicly available information and/or sources which we deem trustworthy, unless explicitly stated otherwise, and (iii) no part of their fees was, is or will be linked to specific opinions, views or outlooks in this report. Quintet strives to publish information based on news, developments and views related to specific companies, sectors or markets. Price targets are based on (i) financial prognoses of the analysts of Quintet, (ii) prognoses of sources considered trustworthy and (iii) valuation models used by the Research department of Quintet. In their valuation analysts use discounted cash flow models (DCF) and a qualitative assessment of the related business case.

Quintet's outlook is based on the expected 12-month price performance from the date of publication of this document. In general, this outlook is valid for 12 months, unless there are reasons to publish a new outlook. The information included is subject to change and Quintet has no obligation after the date of publication of the text to update the information accordingly or to inform you thereof. Quintet does not check and update published outlooks if facts and/or circumstances change. 

Quintet's investment analysts are bound by the bank’s policy on private transactions that is monitored by Compliance. Quintet has implemented procedures and measures to protect confidential information. There are procedural and functional safeguards in place to ensure that analysts can form and express their views and opinions independent of the organisation. 

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