• Conflicts of interest

    • Guidance

      A conflict of interest arises in a situation where a Person with responsibility to act in the interests of one Person may be influenced in his action by an interest or association of his own, whether Personal or business or employment related. Conflicts of interest can arise both for the Employees of Recognised Bodies and for the members (or other Persons) who may be involved in the decision‐making process, for example where they belong to committees or to the Governing Body. Conflicts of interest may also arise for the Recognised Body itself as a result of its connection with another Person.

      The Regulator recognises that a Recognised Body has legitimate interests of its own and that its general business policy may properly be influenced by other Persons (such as its owners). Such a connection does not necessarily imply the existence of a conflict of interest nor is it necessary to exclude individuals closely connected with other Persons (for example, those responsible for the stewardship of the owner's interests) from all decision‐making processes in a Recognised Body. However, there may be decisions, primarily regulatory decisions, from which it may be appropriate to exclude an individual in certain circumstances where an interest, position or connection of his conflicts with the interest of the Recognised Body.

    • MIR 2.5.7 [Deleted]

      A conflict of interest arises in a situation where a Person with responsibility to act in the interests of one Person may be influenced in his action by an interest or association of his own, whether Personal or business or employment related. Conflicts of interest can arise both for the employees of Recognised Bodies and for the members (or other Persons) who may be involved in the decision-making process, for example where they belong to committees or to the governing body. Conflicts of interest may also arise for the Recognised Body itself as a result of its connection with another Person.

    • MIR 2.5.8 [Deleted]

      The Regulator recognises that a Recognised Body has legitimate interests of its own and that its general business policy may properly be influenced by other Persons (such as its owners). Such a connection does not necessarily imply the existence of a conflict of interest nor is it necessary to exclude individuals closely connected with other Persons (for example, those responsible for the stewardship of the owner's interests) from all decision-making processes in a Recognised Body. However, there may be decisions, primarily regulatory decisions, from which it may be appropriate to exclude an individual in certain circumstances where an interest, position or connection of his conflicts with the interest of the Recognised Body.

    • MIR 2.5.9

      The Regulator may have regard to the arrangements a Recognised Body makes to structure itself and to allocate responsibility for decisions so that it can continue to take proper regulatory decisions notwithstanding any conflicts of interest, including:

      (a) the systems and controls intended to ensure that confidential information is only used for proper purposes;
      (b) the size and composition of the Governing Body and relevant committees;
      (c) the roles and responsibilities of Key Individuals, especially where they also have responsibilities in other organisations;
      (d) the arrangements for transferring decisions or responsibilities to alternates in individual cases; and
      (e) the arrangements made to ensure that individuals who may have a permanent conflict of interest in certain circumstances are excluded from the process of taking decisions (or receiving information) about matters in which that conflict of interest would be relevant.

    • MIR 2.5.10

      The Regulator may also have regard to the contracts of employment, staff rules, letters of appointment for members of the Governing Body, members of relevant committees and other Key Individuals and other guidance given to individuals on handling conflicts of interest. Guidance to individuals may need to cover:

      (a) the need for prompt disclosure of a conflict of interest to enable others, who are not affected by the conflict, to assist in deciding how it should be managed;
      (b) the circumstances in which a general disclosure of conflicts of interest in advance of any particular instance in which a conflict of interest arises may be sufficient;
      (c) the circumstances in which a general advance disclosure may not be adequate;
      (d) the circumstances in which it would be appropriate for a conflicted individual to withdraw from involvement in the matter concerned, without disclosing the interest; and
      (e) the circumstances in which safeguards in addition to disclosure would be required, such as the withdrawal of the individual from the decision-making process, or from access to relevant information.

    • MIR 2.5.11

      The Regulator may also have regard to the arrangements made:

      (a) for enforcing rules or other provisions applicable to staff and other Persons involved in regulatory decisions; and
      (b) to keep records of disclosures of conflicts of interest and the steps taken to handle them.

    • MIR 2.5.12

      A Recognised Body must ensure that appropriate arrangements are made to:

      (a) identify conflicts between the interests of the Recognised Body, its shareholders, owners and operators and the interests of the Persons who make use of its facilities or the interests of the facilities operated by it; and
      (b) manage or disclose such conflicts so as to avoid adverse consequences for the sound functioning and operation of the facilities operated by the Recognised Body and for the Persons who make use of its facilities.

    • MIR 2.5.13

      A Recognised Body must establish and maintain adequate policies and procedures to ensure that its Employees do not undertake personal account transactions in Financial Instruments in a manner that creates or has the potential to create conflicts of interest.

    • MIR 2.5.14

      A Recognised Body must establish a code of conduct that sets out the expected standards of behaviour for its Employees, including clear procedures for addressing conflicts ofinterest. Such a code must be:

      (a) binding on Employees; and
      (b) to the extent appropriate and practicable, made publicly available.