This document is a template prepared for review. It must be reviewed, completed and approved by qualified legal and compliance professionals for each jurisdiction in which services are offered before publication. Bracketed items are placeholders.
1. Purpose
[LEGAL ENTITY NAME], trading as JDGlobalFX ("we", "us", "our"), is required under [APPLICABLE CONDUCT RULES] to maintain effective organisational and administrative arrangements to identify, prevent and manage conflicts of interest that could adversely affect the interests of clients. This policy summarises those arrangements and applies to all directors, employees, contractors, tied agents and introducing partners ("Relevant Persons").
2. What Is a Conflict of Interest?
A conflict arises where the interests of the firm or a Relevant Person compete, or could be perceived to compete, with those of a client, or where the interests of one client conflict with another's. In identifying conflicts we consider whether the firm or a Relevant Person:
- is likely to make a financial gain, or avoid a loss, at the expense of a client;
- has an interest in the outcome of a service or transaction that differs from the client's;
- has an incentive to favour one client or group of clients over another;
- carries on the same business as the client; or
- receives an inducement from a third party in relation to a service provided to the client, other than standard fees.
3. Conflicts Relevant to Our Business
3.1 Principal dealing
We act as counterparty to every client transaction. Because we take the other side of your trade, we may profit when you lose and lose when you profit. This is inherent in the over-the-counter CFD model. Our execution model is [EXECUTION MODEL DESCRIPTION], and our hedging arrangements are described in the Order Execution Policy.
3.2 Pricing and spreads
We set the spreads and mark-ups applied to reference prices, creating a potential incentive to widen spreads or apply asymmetric execution parameters in the firm's favour.
3.3 Remuneration
Remuneration structures, particularly for sales and account-management staff, could create an incentive to encourage clients to trade more frequently, deposit more, or use higher leverage than is in their interest.
3.4 Introducing partners
Third parties who introduce clients may be remunerated by reference to the volume traded or revenue generated by referred clients, which could incentivise them to encourage excessive trading or provide misleading information.
3.5 Market commentary
Analysis, signals and commentary published by us may influence trading activity in a way that generates revenue for the firm, and authors may hold positions in the instruments discussed.
3.6 Personal account dealing
Relevant Persons may trade for their own account in instruments that clients also trade, or may have access to information about client orders and positions.
3.7 Client versus client
Where we manage exposure across a book of client positions, actions taken in respect of one client could affect the prices or execution available to another.
3.8 Group relationships
Where [LEGAL ENTITY NAME] is part of [CORPORATE GROUP DESCRIPTION], transactions with, or services provided by, other group entities may give rise to conflicts.
4. Arrangements to Manage Conflicts
| Area | Measure |
|---|---|
| Governance | Board-approved policy; a designated [CONFLICTS OFFICER / COMPLIANCE FUNCTION] responsible for oversight; a conflicts register reviewed [REVIEW FREQUENCY] |
| Execution | Symmetric slippage; pricing derived from [PRICING SOURCES]; independent monitoring of execution quality against [BENCHMARK SOURCES] |
| Remuneration | Sales and account-management pay is not linked directly to client losses; incentive arrangements reviewed by [REMUNERATION OVERSIGHT FUNCTION] |
| Introducing partners | Written agreements; partner due diligence; prohibition on partners giving investment advice or making misleading statements; monitoring of referred-client activity; disclosure of the referral arrangement to clients |
| Information barriers | Restricted access to client order and position data; segregation of dealing, sales and research functions where practicable |
| Personal account dealing | Pre-clearance and reporting requirements; prohibition on trading ahead of or against known client orders |
| Content | Editorial standards requiring balanced commentary that is not presented as a personal recommendation; disclosure of authors' relevant interests |
| Inducements | Prohibition on gifts or benefits that could impair independence, subject to a de minimis threshold of [GIFT THRESHOLD] and a gifts register |
| Training | Mandatory training on this policy at induction and at least annually |
5. Disclosure
Where our arrangements are not sufficient to ensure with reasonable confidence that the risk of damage to a client's interests will be prevented, we disclose the general nature and sources of the conflict, and the steps taken to mitigate it, before undertaking business for that client. Disclosure is a measure of last resort and not a substitute for effective management.
6. Declining to Act
In some circumstances the only appropriate course may be to decline to act for a client or to refrain from a particular activity.
7. Record Keeping
We maintain a record of the services and activities in which a conflict entailing a material risk of damage to client interests has arisen or may arise. The record is reviewed by senior management at least [REVIEW FREQUENCY] and retained for [RECORD RETENTION PERIOD].
8. Review
This policy is reviewed at least annually and whenever a material change to our business, products or structure occurs. Material changes are published on our website.
9. Contact
Questions about this policy may be directed to [COMPLIANCE EMAIL].