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Conflicts of interest

Malfex Investment LLC Conflict of Interest Policy

The services provided on www.malfex.com are provided by Malfex Investment LLC, a company incorporated in Dubai license number 1091827 acting as mother company MFX investment stock joint company in baku Azerbaijan and exisiting under the laws of Azerbaijan under registration number IS-06, licensed by the “Central bank of Azerbaijan” .

Over-the-counter margined derivative contracts including contracts for difference and spot foreign exchange are complex instruments. They come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work, and whether you can afford to incur losses and have the appropriate risk appetite. We recommend you seek professional advice before investing.

  1. Introduction

1.1. It is important to identify and effectively manage conflicts of interest, which arise or may arise in the course of providing a service and carrying out activities, as their existence may lead to material risk of damage to a client’s nterests. This document sets out MFX’s policy for the management of such conflicts of interest.

1.2. Malfex has taken this opportunity to examine its policies and procedures to ensure they remain fit for purpose and address, where potentially relevant, the issues in a way which is proportionate to the scale and complexity of its business. Both the policy and the register of conflicts of interest will be reviewed on at least an annual basis.

1.3. This document does not intend to create third party rights or duties or form part of any contractual agreement between the firm and any client. This policy may be amended and updated at any time if any material change occurs and will be reviewed on at least an annual basis.

1.4. If at any time you are in doubt as to how to act in a given situation where you are faced with an actual or potential conflict of interest, you should contact the Compliance Officer.

1.5. Whilst conflicts of interest are important to be adhered to by all of MFX’s staff, they are non- exhaustive, and certain other additional rules may apply to readers who are members of professional associations by virtue of their job role. Failure to follow any of the rules whether by express breach, or failure to follow any of the spirit of identifying, mitigating and managing conflcts of nterest may also be a breach of an employment contract. Disciplinary action may be taken by Malfex as a result.

  1. Conflicts of Interest

2.1. These services that Malfex provides to its clients could potentially give rise to conflicts of interest entailing a material risk of damage to the interests of one or more clients. This document aims to set out these potential conflicts and the procedures that are in place to be followed and measures to be adopted in order to manage such conflicts.

2.2. Conflicts of interest may occur between a customer and Malfex, including its managers, employees or any persons directly or indirectly linked to the firm, or between two or more clients.

2.3. Treating customers fairly is central to the core values of Malfex. There is an embedded culture that understands what is considered acceptable and unacceptable behavior. As such, conflicts of interest and the identification / management / mitigation thereof are central to this philosophy and culture.

3. Definition

3.1. An actual or potential conflict may arise when, in the exercise of its activities and services, the interests of Malfex (including its managers, employees and appointed representatives or any person directly or indirectly lnked to them by the control); or its associates, and the interest of ts clients, are drectly or ndirectly n competition, and which could significantly prejudice the client’s interests.

4. Identifying situations where a conflict may arise

4.1. The circumstances giving rise to conflicts of interest include all cases where there is a conflict between the:

  1. interests of Malfex, an individual member of staff, certain persons drectly or indirectly connected to Malfex; and the duty that Malfex owes to a client; or

  2. differing interests of two or more clients, as Malfex owes a separate duty to each of them.

4.2. Conflicts of interests could prejudice a client in various ways, whether or not Malfex suffers any financial loss and independently of whether the actions or the motivations of the employees involved are intentional. For the purposes of dentifying the types of conflicts of interest that arise, or may arise, Malfex must take into account, as a minimum whether the firm, a relevant person (e.g. a partner employee or an appointed representative or a drector partner or employee of an appointed representative or a person who is directly involved in the provision of services to the firm or its appointed representative under an outsourcing agreement) or a person directly or indirectly linked by control to the firm:

  1. is likely to make a financial gain, or avoid a financial loss, at the expense of the client;

  2. has an interest in the outcome of the service to, or a transaction carried out for, a client which differs from the client’s interest;

  3. has a financial or other incentive to favour one client (or group of clients) over the interests of another;

  4. carries on the same or similar business as the client; and/or,

  5. receives an inducement from a third party in the execution of the service provided to the client, other than the standard commission/fee for that service.

5. Generic Conflicts

5.1. Malfex has identified the following circumstances in which general types of potential conflicts of interest may arise:

(i) the firm or an associate undertakes designated investment business for other clients including its associates (and the clients of its associates);

  1. a partner or employee of the firm, or of an associate, is a director or partner of, holds or deals in securities of, or is otherwise interested in any company whose securities are held or dealt in on behalf of a client;

  2. a partner or employee of the firm, or of an associate, is involved in the management of any company whose securities are held or dealt in on behalf of a client;

  3. a transaction is effected in units or shares of a fund or company of which the firm or an associate is the manager, operator or adviser;

  4. a transaction is effected in securities in respect of which the firm or an associate, or a partner, director or employee of the firm or an associate, is contemporaneously trading or has traded on its/their own account or has either a long or short position; and / or, the firm may, when acting as agent for a client, match an order of the client with an order of another client for whom it is acting as agent.

  1. Prevention and management

6.1. Malfex has identified specific potential conflicts of interests, which may arise in relation to its activities. The general nature and/or source of these conflicts will be disclosed to clients before undertaking business in sufficient detail to enable the client to make an informed decision about the service in the context n whch the conflct has arisen. For each potential situation, Malfex has analysed whether or not the risk is actual or potential for one or more of its clients.

6.2. It is not always possible to prevent actual conflicts of interest from arising.

6.3. In that case Malfex will try to manage the conflicts of interests by segregating duties

where possible or by establishing information barriers. In certain circumstances, Malfex may have to decline to take on a new client.

6.4. If Malfex considers developing new products or services or making other changes to its business model or operations, Senior Management will consider whether any additional potential conflicts of interest arise.

6.5. Senior management will update the “Conflicts of Interest Policy” and “Register of Potential Conflicts of Interest” as necessary on an ongoing basis and formally consider the continued adequacy of the arrangements on an annual basis.

  1. Inducements including gifts and hospitality

7.1. Malfex maintains business relationships with third parties who may remunerate Malfex in the form of management and performance fees, which can constitute monetary or non-monetary benefits thereby mparing MFX’s fiduciary duties to the clent. Such payments are classified as inducements.

7.2. Gifts and hospitality could lead to potential conflicts of interest. No employee may accept from, or give to, any person any gift or other benefit that cannot properly be regarded as justifiable in all circumstances. Policies and procedures have been implemented to ensure that staff and their connected persons do not offer or accept gifts or inducements which may give the perception that decisions or actions are not impartial.

7.3. All employees must act with the highest standards of integrity to avoid any allegations of conflicts of interest.

7.4. A record is kept by the Compliance Officer of any gifts or hospitality received or given. Where an invitation to a hospitality event could be construed as being a business inducement, it must be declined and the Compliance Officer informed.

  1. Personal account dealing

8.1. Employees may only undertake personal investment activities that do not breach applicable law or regulation, do not unduly distract from their employment responsibilities and do not create an unacceptable risk to the company’s reputation. Transactions should also be free from business and ethical conflicts of interest. Employees must never misuse proprietary or client confidential information in their personal dealings and must ensure that clients are never disadvantaged as a result of their dealings.

8.2. MFX’s Personal Account Dealing Policy has been established to ensure that personal account dealing by members of staff comply with this policy. This includes a requirement for pre-deal approval from the Compliance Officer. Such permission is normally only valid for 24 hours.

  1. Outside employment, external directorships and business interests

9.1. No employee may engage in any additional occupation without the consent of the Company. In certain circumstances, consent may be withheld.

9.2. Employees must not accept personal fiduciary appointments (such as trusteeships, Director appointments or executorships other than those resulting from family relationships) without first obtaining written approval from the COO or the Compliance Officer.

  1. Aggregation of orders.

    10.1. Where Malfex aggregates the orders of clients, it must ensure that this does not work


to the overall disadvantage of any client whose order s to be aggregated Malfex makes reference to this within the Order Execution Policy.

  1. Disclosure

11.1. In certain cases, Malfex may disclose the general nature and/or source of potential or actual conflicts to its client in writing before undertaking business on its behalf so that the client can decide whether or not to accept these potential conflicts.

11.2. If it is not possible to avoid or manage a conflict of interest, Malfex may have no choice but to decline to provide the service requested.

  1. Segregation of Duties

12.1. There are several distinct tasks within the investment management business that could lead to potential conflicts of interest that are mitigated by them being segregated from the individuals directly involved in the task.

  1. Information barriers

13.1. Malfex maintains appropriate policies in its internal policies detailing the potential use of “Insider Lists” and “Information Barriers” so as to limit or withhold the use of information that is price- sensitive, confidential, and could give rise to market abuse, restrictions on dealing, conflicts of interest, or any other improper or unethical activities.

13.2. The Compliance Officer monitors along with the relevant business line managers the effectiveness of any Information Barriers that may be required. In certain circumstances staff may need to be taken “across the wall”, should this be required, the Compliance Officer must be notified and a record made thereof.

  1. Remuneration and Oversight

14.1. The management oversight and determination of appropriate remuneration of members of staff is conducted by MFX’s Senior Management.

14.2. Remuneration is based on the overall results of the firm and is not based on the success of any particular transaction.

14.3. Remuneration for customer facing and sales staff should be partly based on business production.

14.4. Staff are subject to appropriate management and supervision to ensure that Malfex is able to demonstrate that it has appropriate and effective arrangements in place to ensure that conflicts of interest are properly managed.

  1. Record Keeping

15.1. Malfex must keep and regularly update a written record of the kinds of ancillary services or activities carried out by or on behalf of the firm in which a conflict of interest entailing a material risk of damage to the interests of one or more clients has arisen or, in the case of an ongoing service or activity, may arise. These records will be for a minimum period of 10 years from the date of creation and are maintained on an ongoing basis by the Compliance Officer.

  1. Reporting

16.1. Conflicts of Interest situations or potential conflicts situations should be reported to the Compliance Officer immediately.