Definition

Conflict of Interest is a situation in which an individual and/or a corporation is in a position to exploit a professional or official capacity in some or any way for their personal benefit. It exists when a party to a transaction could potentially make gain from taking actions that are detrimental to the other party in the transaction.

Pravin Ratilal Share And Stock Brokers Ltd (PRSSB) shall take all necessary and reasonable steps to identify conflicts of interest between itself, its managers and employees or any person directly or indirectly linked to them by control, and a client or between one client and another.

Regulatory Requirement

SEBI vide its circular no. CIR/MIRSD/5/2013 dated August 27, 2013 issued a GeneralGuidelines for dealing with Conflicts of Interest of Intermediaries, Recognized StockExchanges, Recognized Clearing Corporations, Depositories and their Associated Persons inSecurities Market. SEBI decided to put in place comprehensive guidelines to collectivelycover such entities and their associated persons, for elimination / avoidance of their conflict ofinterest and educating the Associated Persons as defined in Securities and Exchange Boardof India (Certification of Associated Persons in the Securities Markets) Regulations, 2007 forthe compliance of the guidelines. SEBI advised to lay down, with active involvement of seniormanagement, policies and internal procedures to identify and avoid or to deal or manageactual or potential conflict of interest, develop an internal code of conduct governingoperations and formulate standards of appropriate conduct in the performance of theiractivities, and ensure to communicate such policies, procedures and code to all concerned.

Objective

The mismanagement of conflicts can present serious risk to PRSSB and its members, managers or employees, clients and other market participants. For this reason proper management of conflict is central to the fair and effective operation of the organization. It is our policy as well as moral responsibility to meet the highest standards of ethical and market practice in respect of the management of conflict of interest and to act at all times in the best interest of our clients.

Identification of Conflict of Interest

In order to help us identify potential conflict of interest, we have considered a number of areas, including the following:

• Circumstances where we could make a financial gain, or avoid a financial loss, at the expense of the clients;
• Situations where we could have an interest in the outcome of the service provided to the client or of a transaction carries out on behalf of the client, which is distinct from the client’s interest in that outcome;
• Where a financial or other incentive to favour the interest of another client or group of clients over the interest of the client might arise;
• Where we carry on the same business and the client; and
• Where we may or will receive from a person other than the client and inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard commission or fee for that service.

Measures to deal with conflict of interest

Where a conflict is identified, we will seek to organize our business activities in a manner which avoids such a conflict. We shall ensure the following:-

1. At all times maintain high standards of integrity in the conduct of our business;
2. Ensure fair treatment of our clients and shall not discriminate amongst them;
3. Ensure that our personal interest does not, at any time conflict with our duty to our clients and client’s interest always takes primacy in our advice, investment decision and transactions;
4. Make appropriate disclosure to the clients of possible source or potential areas of conflict of interest which would impair our ability to render fair, objective and unbiased services;
5. Endeavor to reduce opportunities for conflict through prescriptive measures such as through information barriers to block or hinder the flow of information from one department / unit to another, etc.;
6. Place appropriate restrictions on transaction in securities while handling a mandate of issuer or client in respect of such security so as to avoid any conflict;
7. Not deal in securities while in possession of material non published information;
8. Not to communicate the material non published information while dealing in securities on behalf of others;
9. Not in any way contribute to manipulate the demand for or supply of securities in the market or to influence the price of securities;
10. Not have an incentive structure that encourages sale of products / securities not suiting the risk profile of the client;
11. Not share information received from clients or pertaining to them obtained as a result of dealing for our personal interest;

The above mentioned policy is to be implemented and adhered to by one and all in its true spirit.