UK Equity Research Conflicts Management Policy

The following statements form part of Execution Limited’s policy on the production and distribution of investment research reports. This policy does not have the effect of extending our normal legal obligations to any reader or research recipient.

The UK regulator, FSA, has set out specific requirements in order for research to be described as “investment research” Unless otherwise stated research produced by Execution Limited meets all of the criteria specified.
Any research material produced in the UK that does not meet one (or more) of those criteria will be clearly labelled as a “marketing communication” and will state that the material is not “independent investment research”.
In order to minimize the potential for conflicts of interest to arise in relation to the provision of investment research the following measures have been put in place by Execution Limited:

All research analysts have received training on the controls and procedures Execution Limited has put in place to manage conflicts of interest.
Research analysts are not permitted to carry out personal account dealing in the sectors they cover in research reports.

Research is a client facing service, and is managed independently of other business areas. In particular, re-insurance, Equity Capital Markets (“ECM”) and/or sales and trading staff do not supervise research analysts, do not decide on the coverage, timing or content of research and do not determine research analysts’ remuneration.

Research analysts' remuneration is not linked either to specific transactions of any department including ECM, sales and trading and re-insurance, nor to their stock recommendations;
Execution Limited does not offer or agree to provide favourable investment research on any company or security, nor to make or change any particular recommendation;

Research analysts may be brought across the Chinese Wall surrounding the ECM department. If so this will be at the latest practical time and in accordance with the detailed wall-crossing procedures, to advise on pricing, structuring or likely market appetite for an issue and, occasionally, to assist in due diligence;
Research analysts may meet potential ECM clients prior to Execution Limited receiving a mandate, or attend investor briefings, where this does not compromise (or give the appearance of compromising) their objectivity;
Sections of draft research reports may be shown to subject companies before publication, but only for the purpose of verification of factual statements. Draft research reports must not include recommendation, price targets or any references to fair values;

Any comments relating to research analysts’ opinions are required to be ignored or, if necessary, escalated to the Compliance Officer;

Research Analysts may not accept any inducements offered by subject companies. If any inducement were to be offered by any party to a research analyst in order to secure favourable research coverage from that analyst, this must be reported to the Compliance Officer immediately;

Responsibility for the content of research recommendations rests primarily with the research analysts named as having produced them. Editorial control is not given to anyone whose role or interests might reasonably be considered to conflict with the interests of the clients to whom the research is to be published or distributed;

The timing of publication of research is controlled by the Head of Research. Research is distributed to both clients and internally within the Execution Group simultaneously by the same means;

Research analysts must not discuss the potential timing or content of research with anyone outside the research department except for the purpose of checking factual accuracy until such time as either the research has been distributed to all relevant clients; and
when talking to sales and trading staff (including briefings at morning meetings), research analysts must not communicate material views and conclusions which have not yet been conveyed in published research.
Research analysts may provide information and ideas to the sales and trading staff but only where this does not give rise to a lack of independence in the analysts’ research or give rise to conflicts with the interests of the persons to whom the research is disseminated.

Should a research analyst be taken over the Chinese Wall and be in receipt of unpublished price-sensitive information he or she may not comment on the matter in question until such time as the information is either time-expired or has been made public;
Research analysts must not get involved in activities that are inconsistent with the maintenance of their objectivity. In particular, they do not get involved in the preparation of issuer marketing or road shows for new issues.