Investment research policy

Summarised below are the principal procedures that apply to the production and dissemination of Investment Research which must be adhered to at all times.

  • It is important for personnel to consider possible Conflicts of Interest and Market Abuse issues which may occur within Investment Research departments. Please refer to the Firm’s Conflicts of Interest Policy and the Market Abuse Policy for further details of Bryan Garnier’s arrangements in these areas. You are also reminded of Bryan Garnier’s Personal Account Dealing restrictions as they apply to research personnel working at the Firm (see Personal Account Dealing Policy)
  • It is imperative that Investment Research publications are kept confidential during the drafting period and the Chinese Wall procedures set out in the Conflicts of Interest Policy must be followed at all times. Research staff are reminded that they are not permitted to discuss the timing or content of forthcoming investment research publications with any personnel outside the Research department other than in limited circumstances where certain individuals have been brought over the Chinese Wall. When Sales and trading staff are briefed on research publications in advance of its distribution to clients, Bryan Garnier operates strict controls to avoid any conflicts of interest from such Sales/trading personnel are not permitted to discuss or act upon the research, other than in respect of unsolicited client orders, until the recipients of the investment research have had an opportunity to act upon it. Similarly, under no circumstances should forthcoming publications be discussed with clients or other external parties prior to publication. Issuers are permitted to review investment analysts’ investment research prior to publication for review of factual accuracy only.
  • Bryan Garnier uses a standard Research Disclosure Legend on all research material for the protection of the firm and the research In addition, standard regulatory disclosure information must also be included in all Independent Research. No deviation is permitted from this format. All research must be reviewed and approved by the Research Editor and/or the Head of Equity Research or their delegee prior to publication. These procedures apply to all investment research including updates and any changes to recommendations.
  • It may be the case that Sales/Trading personnel will have different views on macro- economic or specific company analyses. It must be made clear when discussing such views with clients that these are personal to the Sales/Trading individual and are not the views of the Research Analyst.
  • Bryan Garnier takes into account the IOSCO Principles and recommendations in respect of the publication of Investment Research and the duty to have in place procedures for the prevention, management, monitoring and disclosure of conflicts of interest. These principles and recommendations are attached as Appendix A to this report.
  • In accordance with the IOSCO principles, Bryan Garnier shall not in any circumstances seek to influence an analyst’s recommendation or engage in any retaliatory action in respect of such recommendations.
  • Bryan Garnier’s policy is to ensure that all statements by its analysts that are new or material are disseminated to both clients and sales/trading personnel in accordance with these procedures.
  • Analysts are not permitted to participate in any surveys or provide any recommendations or analysis to clients or other parties that are not consistent with the published researchrecommendations.

INTRODUCTION

  • This Manual sets out Bryan Garnier’s policies and procedures to ensure compliance with the Firm’s overall risk management and operating procedures and their particular application to the publication and dissemination of investment research.
  • Bryan Garnier’s policies and procedures are designed to ensure that Bryan Garnier operates at all times within the spirit and the letter of the Financial Conducts Authority’s (FCA) rules as they apply to the production and dissemination of investment The objective of this Manual is to provide all research personnel with clear guidelines for compliance with Bryan Garnier’s internal regulations and those of the Financial Conducts Authority (“FCA”).
  • Bryan Garnier’s guidelines are designed not only to ensure compliance with the FCA’s rules but also to establish controls for protecting the Firm’s professional reputation and that of its research analysts within the overall risk management structure and the “Treating Customers Fairly” initiative within the firm.
  • Bryan Garnier’s risk management and operating procedures are firmly based on the relevant rules and guidance in the FCA The procedures are not intended to place barriers in the way of conducting business but seek to set out simple and effective processes for ensuring that it does not suffer any regulatory or reputational damage in carrying out its business activities.
  • Although this document is distributed as a stand-alone document to Research Department personnel, these procedures are also found in and form an integral part of Bryan Garnier’s Compliance Manual and Conflicts of Interest Policy.
  • Any issues that may arise in the course of Research Department activity that are not clearly addressed in these procedures should be referred in the first instance to the Head of Research.

 

THE FCA RULES

  • The relevant sections of the FCA Handbook that apply specifically to investment research are set out in Chapter 12 of the Conduct of Business Sourcebook, the Markets in Financial Instruments (Amendment) (EU Exit) Regulations (SI 2018/1403) [UK MIFID], and the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019.310) [UK MAR]. As with all communications, attention must also be paid to the requirement that all communications with clients must be fair, clear, and not misleading.
  • There are critical differences between how the FCA rules apply to Independent and Non-independent research but for both types of research, the rules on conflicts of interest will always be applicable. In particular, Non-Independent Research must be treated as a marketing communication and the Financial Promotion rules as set out in Chapter 4 of the Conduct of Business Sourcebook will apply.
  • Chapter 12 of the Conduct of Business Sourcebook provides rigorous rules with regard to the publication of Independent Research including requirements in respect of Personal Account Dealing and Conflicts of Interest as they apply to research Details of these requirements are set out in these procedures.
  • There are also rules prohibiting or restricting certain types of behaviour in respect of inducements, promises of favourable research coverage and internal dissemination of draft research reports. Bryan Garnier’s policies reflect such restrictions and prohibitions and must be followed at all times.
  • Research Analysts must not participate in any investment banking activities (such as corporate finance) or assist in pitches for new business, road shows or other methods of marketing new issues where such participation could prejudice or appear to prejudice the independence of their research or conflicts with their duties to the recipients of their research. Further information is provided in the section below entitled “Involvement of analysts in other activities”.
  • Bryan Garnier uses standardised disclosures which can be found here: https://www.bryangarnier.com/legal-information/bryan-garnier-co-legal-information/disclaimer/

 

SCOPE

The types of research covered by this policy.

The FCA has distinguished between “Investment Research” (or “independent/objective”) research and “Non-independent Research”.

The definition of Investment Research is provided in the Glossary of the FCA Handbook:

Research or other information recommending or suggesting an investment strategy, explicitly or implicitly, concerning one or several financial instruments or the issuers of financial instruments, including any opinion as to the present or future value or price of such instruments, intended for distribution channels or for the public, and in relation to which the following conditions are met:

  • It is labelled or described as investment research or in similar terms, or is otherwise presented as an objective or independent explanation of the matters contained in the recommendation;
  • If the recommendation in question were to be made by an investment firm to a client, it would not constitute the provision of a personal recommendation.
  • A personal recommendation is advice on investments that is presented as suitable for the person to whom it is made or is based on a consideration of the circumstances of that A recommendation is not a personal recommendation if it is issued exclusively through distribution channels or to the public.”

It is important to note that the definition of investment research covers both written and non-written communications.

The disclaimer that must appear on all Bryan Garnier research material specifically states that the material is not a personal recommendation. The disclaimer addresses all the regulatory requirements that must be included for independent research. Bryan Garnier’s research on equity listed companies is generally classified as Independent Investment Research.

Bryan Garnier also conducts corporate research for small emerging growth companies which does not generally meet the definition of “Independent Investment Research” as it does not comply with all the independence requirements. Due to Bryan Garnier’s size and structure, analysts in these areas may for certain purposes represent the interests of companies referred to in the research or of Bryan Garnier. For such research, it may be the case that analysts have responsibilities to those companies which could conflict with the interests of the clients who receive the research. This research must not therefore be presented by Bryan Garnier as an independent assessment of the value or prospects of the investments or companies in question and this must be made clear to the recipients of the research. As previously indicated non- independent research is to be treated as a marketing communication even if it contains a research recommendation and must be clearly marked as non-independent research. At all times it must endeavour to ensure that all research is of a high standard and is clear, fair and not misleading. Bryan Garnier’s standardised disclosures can be found here. https://www.bryangarnier.com/legal-information/bryan-garnier-co-legal-information/disclaimer/

The relationship between Independent and Non-independent analysts and research

Whilst most of Bryan Garnier’s analysts produce either independent investment research or non-independent research, some of Bryan Garnier’s analysts may produce both. In accordance with FCA requirements, all research is clearly identified as either “independent investment research” or “non-independent research” in order to prevent any confusion over its status.

 

ORIGINATION AND PUBLICATION PROCEDURES

  • Bryan Garnier has put in place the following procedures to ensure that the distribution of its Independent Investment Research and other research communications (collectively “Research Communications”), such as the morning email, meets the FCA requirements with respect of ensuring that any potential Conflicts of Interest are properly and appropriately managed:
  • The distribution channels utilised by Bryan Garnier for its Research Communications are as follows:
    • Hard copy distribution to clients by post or courier
    • Electronic distribution to clients via pdf or email; and
    • Via Third Party sources such as Bloomberg, Reuters, Factset, Thompson, Capital IQ and Market scope.
  • Bryan Garnier’s policy is to ensure that all statements by its analysts that are new, or material are disseminated to both clients and sales/trading personnel in accordance with these procedures. Any new or material update of a research analyst’s view, for example an immediate response to issuer news must be made available to clients through Bryan Garnier’s usual distribution channels as detailed Analysts may send commentary or other informal written analysis to particular clients rather than to all clients as a whole and they may also speak to individual clients to discuss research provided that Bryan Garnier’s policy with regard to any new and material statements is respected at all times.
  • Where a recommendation is “under review”, for example, following publication of company results or similar breaking news, any revision or change to the published recommendation must be published within 24 hours of the recommendation being categorised as under review.
  • Analysts are not permitted to participate in any surveys or provide any recommendations or analysis to clients or other parties that are not consistent with the published research recommendation.
  • Research communications or information regarding such communications must not be made available to Bryan Garnier sales/trading staff or to individual clients in advance of being generally distributed. When sales and trading staff are briefed on research publications in advance of its distribution to clients, Bryan Garnier operates strict controls to avoid any conflicts of interest from such briefings. Sales/trading personnel are not permitted to discuss or act upon the research, other than in respect of unsolicited client orders, until the recipients of the investment research have had an opportunity to act upon it. The briefing does not take place until after the markets have closed and all trading/sales staff are required to sign a compliance agreement to confirm that the contents and details of the investment research will not be discussed with anyone prior to publication. In addition, the sales and trading desk are not permitted to discuss the report or conduct any trading in respect of the investment research, other than for unsolicited client orders, until the recipients of the investment research have had a reasonable opportunity to act upon it. Bryan Garnier requires all Sales and Trading staff who attend such briefings to sign a non-disclosure acknowledgement and undertaking.
  • The briefing of Sales/Trading personnel by analysts on their initial reaction to “breaking news” (provided that no change or proposed change in recommendation, price target or forecast is communicated) does not constitute a research report and hence is not subject to theserestrictions.
  • A research analyst may discuss his or her published views on the sector and on other companies in the sector. This may include approaches to valuation, multiples, ratings and spreads for the sector and peer group companies and hypothetical valuations, multiples, ratings or spreads derived from them.
  • The Research Disclosure Checklist must be completed prior to the dissemination of any research All research publications must be reviewed and approved by the Editor and/or the Head of Research prior to distribution.
  • Distribution to clients is coordinated so as to ensure that research reports are distributed to all recipients at the same time subject to any IT system or other restrictions/constraints beyond the control of Bryan Garnier.
  • A distribution list is maintained for all investment research publications in order to ensure that investment research is only provided to professional Investment Research may be provided to other parties, such as industry contacts and journalists, for information purposes following distribution to Bryan Garnier’s clients. The distribution list is checked periodically as part of Bryan Garnier’s compliance monitoring programme to verify that investment research is not being distributed to retail clients.
  • All investment research and recommendations must be completed in accordance with Bryan Garnier’s Editing Guide.

 

STANDARDS FOR FAIR PRESENTATION OF INVESTMENT RECOMMENDATIONS

This section should be read in conjunction with the required disclosures section below.

  • All research communications must clearly differentiate between factual information and interpretations, estimates, opinions, or any other non-factual information.
  • Sources quoted must be reliable. If there is any concern regarding the reliability of a      source, then this must be indicated.
  • All projections, forecasts and price targets must be clearly labelled, and any material assumptions made in producing or using such data must be included.
  • As a general principle, the substance of any research recommendations must be capable of standing up to scrutiny and be able to be substantiated.
  • All substantially material sources must be referenced including, if appropriate, the issuer (note also the disclosure requirements below).
  • Any valuations or methodologies used to evaluate a security, derivative, or issuer or to set price targets must be adequately summarised.
  • If the research recommendation differs from an earlier recommendation issued during the preceding 12-month period, the change and the date of the earlier research recommendation must be indicated clearly and prominently.

The above requirements do not apply to non-written research recommendations to the extent that they would be disproportionate.

 

MANAGING RESEARCH CONFLICTS

Identifying Research Conflicts

Bryan Garnier has in place procedures to identify and manage potential conflicts arising from the publication of research. Internal guidance is provided to all personnel to ensure that they are aware of how conflicts of interest may arise and to ensure that analysts understand the Firm’s, and their own, obligations in relation to the management of conflicts of interest. These conflicts can arise in respect of corporate finance clients, investor clients, agency trading activities and the interests of Bryan Garnier’s officers and employees. Detailed below are the procedures utilised by Bryan Garnier to take reasonable steps to manage these conflicts.

Procedures for managing conflicts of interest related to the production of investment research reports.

Relationship with Companies on which research is published.

Bryan Garnier will not normally, at any given time, publish both independent investment research and non-independent research on a particular company or investment.

Chinese Walls

Bryan Garnier & Co Limited has implemented Chinese Walls to regulate the unauthorised flow of inside information between and within business areas, including Corporate Finance, Sales & Trading and Research.

Research Coverage

Bryan Garnier does not offer or promise research coverage to a client under any circumstances. Research coverage decisions are made by the Head of Research.

Reporting lines and remuneration

Research analysts are supervised by and report directly to the Head of Research.

Decisions on coverage, content and timing of investment research are made by the Head of Research. In making such decisions, the Head of Research may consider input from various sources, including managers of the Company’s sales & trading and corporate finance.

Research analysts’ remuneration is not directly linked to specific transactions but related to the Company’s overall result and the analyst’s individual performance.

Wall Crossing Procedures

Bryan Garnier has implemented clear wall-crossing procedures in respect of the receipt of non- public information by any employees, including investment research analysts. Please refer to Appendix B of the Conflicts of Interest Policy.   These procedures include a requirement to obtain prior approval from the Head of Research and Compliance in respect of any wall-crossing.    All such approvals are logged, and appropriate restrictions are imposed on the analyst whilst the information remains non-public. Where an analyst has access to non-public market sensitive information, the analyst is prohibited from subsequently publishing or disseminating research recommendations or opinions on such company unless and until such public information is in the public domain.

Personal Account Dealing

Bryan Garnier operates a strict staff personal account dealing policy, which includes a requirement for the pre-authorisation by the Compliance Officer of all personal account trading in the stocks and related financial instruments in the Bryan Garnier Restricted List and the Bryan Garnier Universe. This authorisation will not be given if there is a risk that to do so could lead to potential conflicts of interest. In addition, Yearly   reporting of all personal account dealing transactions is required under Bryan Garnier’s personal account dealing policy.

Research analysts are prohibited from undertaking transactions on their own account or for the account of relevant persons, as defined in the FCA Rules and set out in the Personal Account Dealing Policy, in investments that relate to the industry or business sector on which they prepare research. The analyst’s industry or business sector is limited to his/her geographic industry area of coverage. For the avoidance of doubt this includes any financial instruments (including derivatives) the price of which is closely affected by price movements in such securities.

For reference, research analysts and other relevant people must not undertake personal transactions or trade, other than as market makers acting in good faith and in the ordinary course of market making or in the execution of an unsolicited client order:

  • On behalf of any other person, including the investment firm, in financial instruments to which investment research relates.
  • In any related financial instruments, with knowledge of the likely timing or content of that investment research that is not publicly available (or available to clients but cannot readily be inferred from information that it is so available), until the recipients of the investment research have had a reasonable opportunity to act on it.

In circumstances not covered by the points above, research analysts and any other relevant people involved in the production of investment research must not undertake personal transactions in financial instruments to which the investment research relates, or in any related financial instruments, contrary to current recommendations, except in exceptional circumstances and with the prior approval of the firm’s legal or compliance function.

A “related financial instrument” means any financial instrument the price of which is closely affected by price movements in another financial instrument that is the subject of investment research and includes a derivative on that other financial instrument.

The “exceptional circumstances” when personal transactions can be undertaken include those circumstances where, for personal reasons relating to financial hardship, the financial analyst or other person is required to liquidate a position (Recital 53, UK MiFID Org Regulation).

Inducements

In accordance with FCA Rules, Bryan Garnier does not offer or agree to provide favourable research on any company or security, nor to make or change any particular recommendation. Its analysts are prohibited from soliciting or accepting any inducement to publish or change any opinion or recommendation or from offering, soliciting, or accepting any inducement or incentive for the provision of favourable research. If an analyst is offered such an inducement or incentive, they are required to report this immediately to the Head of Research and to Compliance. Analysts are permitted to accept nominal gifts and ordinary business entertainment in accordance with the Company’s formal policies on the receipt of gifts and entertainment. A company covered by an analyst may offer to pay reasonable expenses for a visit to its business premises and offer reasonable hospitality during such a visit; this will not be regarded as an inducement provided that it meets the Firm’s general policies in respect of gifts and entertainment and has been approved by the Head of Research and the Compliance Officer in advance.

Outside Business Interests/Activities

In order to prevent research analysts from being or being perceived to be influenced by their outside business interests, Bryan Garnier requires all employees, including research analysts and other household members, to obtain prior permission to engage in any outside business activity or interest. On an annual basis, all employees are required to provide details of any changes to outside interests or directorships or to confirm that there have been no changes in the past twelve months. An analyst (and any members of the analyst’s household) may not serve as an officer, director, employee, or advisor to a company in the sector/industry which the analyst covers.

Dissemination of Research

Research reports are made available to all relevant recipients at the same time.

It is imperative that Investment Research publications remain confidential during the drafting period and the Chinese Wall procedures must be followed. It is not permitted for Sales/Trading personnel in general to know what and when research material is to be published although on occasion certain individuals may be brought over the Chinese Wall (see Wall Crossing Procedures). This should only occur where there is a valid business reason to do so and is subject to the pre-approval of the Head of Research and Compliance. As previously noted, Investment Research analysts are not permitted to comment on forthcoming publications either internally or with clients.

As mentioned above, sales and trading staff are sometimes briefed on research publications in advance of its distribution to clients. Bryan Garnier operates strict controls to avoid any conflicts of interest from such briefings details of which are set out the Origination and Publication section above.

Issuers are permitted to review investment analysts’ investment research prior to publication for review of factual accuracy only. Under no circumstances must the Issuer be informed of the Analyst’s recommendation or valuation and the Executive summary, recommendations, valuation, target price and fair value must be removed from any draft sent for review. Any factual changes made by the issuer will be tracked and require the approval of the Head of Research.

Investment research prepared and disseminated by Bryan Garnier is not intended for Retail Clients and this is made clear in the regulatory disclosures. Dissemination of research is monitored to ensure that it is only provided to professional investors (other than where it is provided to other parties such as industry contacts and journalists for information purposes).

Involvement of analysts in other activities

Investment analysts are restricted from roles which could prejudice, or appear to prejudice, the independence of their research or conflict with their duties to the recipients of their research, but are otherwise free to use their expertise for the benefit of Bryan Garnier’s clients and, subject to certain restrictions described below designed to reinforce their independence of judgment, for the benefit of the Company itself.

Bryan Garnier’s policy does not permit:

  • using an investment analyst in a marketing capacity or sales pitches if this would give a reasonable perception of lack of independence in the analyst’s research;
  • an investment analyst to act in a way which could reasonably appear to be representing the issuer of a relevant investment, for example at road shows relating to issues or allocations of investments.

However, this does not entail a general restriction on contacts between analysts and corporate finance or sales & trading employees, or between analysts and investment or corporate finance clients of the Company, but all these contacts are subject to guidelines including prior agreement of the Head of Research and Compliance. Accordingly, analysts may become involved in activities where Bryan Garnier is satisfied that the activity will not affect the independence of the research produced by the analyst and Bryan Garnier is satisfied that any potential conflict of interest has been appropriately dealt with. Any interaction by analysts with Trading Clients of Bryan Garnier is solely limited to providing such clients with informed and impartial research opinions.

Corporate Finance Clients

On occasion, analysts may be required to assist the Corporate Finance team in conducting due diligence/analysis of a potential corporate finance client. This assistance may include attendance at meetings with the client, attendance at internal meetings to discuss the Corporate Finance assignment, and the provision of ongoing analysis and views.   Such participation is only permitted where the Corporate Finance Client is not included in the Bryan Garnier Investment Universe and the Analyst has been formally “wall-crossed” under Bryan Garnier’s Corporate Finance procedures.

At all times, both analysts and sales and trading personnel are required to avoid breaching any confidential information relating to clients or research activity. For the avoidance of doubt, analysts are not permitted under any circumstances to disclose the likely timing or content of investment research to any sales or trading employees.

All analysts when submitting research for publication are required to provide an internal certification that neither the views expressed in the research, nor the timing of the publication of the research has been influenced by any knowledge of client’s positions and that the views expressed in the report accurately reflect their personal views about the investment and issuer to which the report relates and that no part of the analyst’s remuneration was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Bryan Garnier does not preclude research analysts from maintaining an active dialogue with sales and trading personnel, just as they do with Trading Clients, provided that they do not disclose the timing or content of forthcoming research reports or disclose or receive material non-public information that is not in accordance with Bryan Garnier’s wall-crossing procedures.

Bryan Garnier’s policy is to ensure that all statements by its analysts that are new, or material  are disseminated to both clients and sales/trading personnel in accordance with these procedures. The briefing of Sales/Trading personnel on the initial reaction to “breaking news” (provided that no change or proposed change in recommendation, price target or forecast is communicated) does not constitute a research report and hence is not subject to these restrictions.

REQUIRED RESEARCH DISCLOSURES

Article 3 of the UK MAR Delegated Regulation contains a set of general obligations relating to the objective presentation of recommendations. This means that investment recommendations must meet all of the following requirements:

  • Facts are clearly distinguished from interpretations, estimates, opinions, and other types of non-factual information.
  • All substantially material sources of information are clearly and prominently indicated.
  • All sources of information are reliable or, where there is any doubt as to whether a source is reliable, this is clearly indicated.
  • All projections, forecasts and price targets and clearly and prominently labelled as such, and the material assumptions made in producing or using them are indicated.
  • Date and time. The date and time when the production of the recommendation was completed is clearly and prominently indicated.

Pursuant to Article 3(2) of the UK MAR Delegated Regulation, if the extent of such disclosure is deemed to be disproportionate compared to the length or form of the recommendation, Bryan Garnier shall ensure that the investment recommendation to state where the required information can be directly and easily accessed.

Persons who produce investment recommendations or other information recommending or suggesting an investment strategy have to disclose clearly and prominently:

  • Their identity.
  • The name and the job title of all individuals involved in the production of the recommendation.
  • Where a person involved in the production of the recommendations is acting under contract, including an employment contract, the name of that person.
  • The identity of the regulator (the FCA in the UK).
  • A reference to any applicable self-regulatory standards or codes of conduct for the production of recommendations (Article 2, UK MAR Delegated Regulation).

Article 5 of the UK MAR Delegated Regulation requires persons who produce recommendations to disclose all relationships and circumstances that may reasonably be expected to impair the objectivity of the recommendation. This includes interests or conflicts of interest, on their part or on the part of any natural or legal person working for the relevant firm under a contract, who was involved in producing the recommendation, concerning any financial instrument or the issuer to which the recommendation directly or indirectly relates.

When the person producing recommendations is a legal person, disclosure must also include any interests or conflicts of interest of any person belonging to the same group that are:

  • Known, or reasonably expected to be known, to the persons involved in the production of the recommendation.
  • Known to persons who, although not involved in the production of the recommendation, have, or could reasonably be expected to have, access to the recommendation prior to its completion.

 

INSTRUCTIONS FOR DISCLOSURES

  1. The meaning of any recommendation made, for example the time horizon for any buy or sell recommendation, appropriate risk warnings and a sensitivity analysis of the relevant assumptions.
  2. The percentage of securities on which Bryan Garnier has a Buy or Sell rating and the proportion of securities in these categories by issuers to which Bryan Garnier has supplied material investment banking services during the previous 12 months. This information must be updated on a quarterly basis.
  3. Whether Bryan Garnier & Co Limited or another company in its group has a shareholding that, individually or combined, exceeds 5% of the paid up and issued share capital of a company that is the subject of the Report (the “Issuer”).
  4. Whether the Issuer has a shareholding that exceeds 5% of the paid up and issued share capital of one or more members of the Bryan Garnier Group.
  5. Whether a member of the Bryan Garnier Group holds one or more financial interests in relation to the Issuer which are significant in relation to the Report.
  6. Whether a member of the Bryan Garnier Group is a market maker or liquidity provider in the securities of the Issuer or in any related derivatives.
  7. Whether in the past twelve months, a member of the Bryan Garnier Group has been lead manager or co-lead manager of one or more publicly disclosed offers of securities of the Issuer or in any related derivatives.
  8. Whether a member of the Bryan Garnier Group is or has in the past twelve months been party to an agreement with the Issuer relating to the provision of investment banking services or has in that period received payment or been promised payment in respect of such services. [Note that this disclosure does not have to be made if it would result in the disclosure of confidential commercial information.]
  1. Whether a member of the Bryan Garnier Group is party to an agreement with the Issuer relating to the production of the Report.
  2. Whether the investment analyst or another person involved in the preparation of the Report has received or purchased shares of the Issuer prior to a public offering of those shares. [Note that the price at which such shares were acquired, and the date of acquisition must be disclosed]
  1. Whether the remuneration of the investment analyst or other persons involved in the preparation of the Report is tied to investment banking transactions performed by the Bryan Garnier Group.
  2. Whether in the past twelve months a member of the Bryan Garnier Group has been remunerated for providing corporate finance services to the Issuer or may expect to receive or intend to seek remuneration for corporate finance services from the Issuer in the next six months.
  3. Whether the investment analyst or another person involved in the preparation of the Report has a short position in the securities or derivatives of the Issuer.
  4. Whether the investment analyst or another person involved in the preparation of the Report has a long position in the securities or derivatives of the Isser.
  5. Whether a partner, director, officer, employee or agent of the Bryan Garnier Group, or a member of such person’s household, is a partner, director, officer, or employee of, or adviser to, the Issuer or one of its parents or The name of such person or persons is disclosed above.
  6. Whether the report has been sent to issuer to verify factual accuracy (with the recommendation/rating, price target/spread, and summary of conclusions removed) and whether any amendments have been made following the review by the issuer.

 

Other than Disclosures 1 and 2 (marked by an *), the above disclosures do not apply to a non- written research recommendation to the extent they would be disproportionate. In respect of Disclosures 1 and 2, these requirements can be met by reference to Bryan’ Garnier’s website where such information can be found.

In addition, Bryan Garnier discloses in general terms the organisation and administrative arrangements it has established for the prevention and avoidance of conflicts of interest with respect to research recommendations.    This disclosure is made by publishing a summary of this policy on the Bryan Garnier website a reference to which is included in all research recommendations.

 

THIRD PARTY INVESTMENT RESEARCH

Bryan Garnier does not disseminate third party investment recommendations.

 

MONITORING

The effectiveness of the Investment Research policy and procedures is monitored by the Compliance Officer as part of the Company’s regular compliance monitoring programme.

The policy is reviewed periodically and no less than annually, to ensure that it continues to meet Bryan Garnier’s regulatory and compliance obligations.

 

APPENDIX A: IOSCO PRINCIPLES AND RECOMMENDATIONS

1.   ANALYST TRADING AND FINANCIAL INTERESTS

 

Principle 1: Mechanisms should exist so that analysts’ trading activities or financial interests do not prejudice their research and recommendations.

 

Core Measures

  • Prohibiting analysts from trading in securities or related derivatives of an issuer they review in a manner contrary to their outstanding recommendations, except in special circumstances subject to pre-approval by compliance or legal personnel.
  • Prohibiting analysts from covering an issuer, where the analyst serves as an officer, director or member of the issuer’s supervisory board and requiring disclosure of any such relationship involving individuals related to or associated with the analyst; in the alternative, requiring analysts covering an issuer to disclose if they, or individuals related to or associated with them, serve as officers, directors or members of the issuer’s supervisory board;
  • Prohibiting analysts from trading securities or related derivatives ahead of publishing research on the issuer of those securities; and,
  • Requiring analysts or firms employing the analysts to publicly disclose if the analysts have investment positions or otherwise have financial interests in issuers that the analysts review.

 

2.   FIRM FINANCIAL INTERESTS AND BUSINESS RELATIONSHIPS

Principle 2.1: Mechanisms should exist so that analysts’ research and recommendations are not prejudiced by the trading activities or financial interests of the firms that employ them.

Core Measures

  • Requiring analysts, or firms employing analysts, to publicly disclose if an analyst’s firm makes a market for securities of an issuer that the analyst reviews or if the firm has a significant financial interest in the issuer;
  • Requiring analysts or the firms employing analysts to publicly disclose if individuals employed by or associated with the firm serve as officers, directors, or members of the supervisory board of an issuer that the analysts review; and
  • Prohibiting firms that employ analysts from improperly trading securities or related derivatives ahead of the analyst publishing research on the issuer of those securities.

Principle 2.2: Mechanisms should exist so that analysts’ research and recommendations are not prejudiced by the business relationships of the firms that employ them.

Core Measures

  • Establishing robust information barriers between analysts and a firm’s other divisions in order to limit the potential for conflicts of interest and prevent other individuals in the firm from attempting to influence analysts’ research;
  • Prohibiting firms that employ analysts from promising issuers favorable research coverage, specific ratings, or specific target prices in return for a future or continued business relationship, service, or investment; and,
  • Prohibiting analysts from participating in investment banking sales pitches and road shows.

 

3.   ANALYSTS’ REPORTING LINES AND COMPENSATION

Principle 3: Reporting lines for analysts and their compensation arrangements should be structured to eliminate or severely limit actual and potential conflicts of interest.

Core Measures

  • Prohibiting analysts from reporting to the investment banking function
  • Prohibiting analyst compensation from being directly linked to specific investment banking transactions;
  • Adopting mechanisms within firms to safeguard reporting line and compensation structures to protect analysts’ independence; and,
  • Prohibiting the investment banking function from pre-approving analyst reports or recommendations, except in circumstances subject to oversight by compliance or legal personnel where investment banking personnel review a research report for factual accuracy prior to publication.

 

4.   FIRM COMPLIANCE SYSTEMS AND SENIOR MANAGEMENT RESPONSIBILITY

Principle 4: Firms that employ analysts should establish written internal procedures or controls to identify and eliminate, manage, or disclose actual and potential analyst conflicts of interest.

Core Measures

  • Requiring firms that employ analysts to have written internal procedures for addressing actual and potential analyst conflicts of interest.