Conflict of Interest Management Policy

Floatpays (PTY) LTD (Registration No 2019/444303/07) (“Floatpays”)

Background

I founded the Floatpays business because I believe every employee should be financially included and have access to financial education, access to their wealth to build a brighter future for themselves and their families.

The people who work at Floatpays share the vision and are committed to the mission we’ve set out to achieve.

We’re driven by the idea that the best work is born from expertise, experience and caring about the people we serve - both employers and employees alike.

Leading investors believe in our mission. We are backed by several investors behind the world’s most ubiquitous FinTech companies, such as Flutterwave, Stitch, Yoco and Trivago.

Our vision & mission

We want to make financial inclusion and wellbeing for every working person on the continent a possibility. Our mission is to partner with Africa’s employers to give their people the ability to instantly access their earned wages whenever they need it, save and manage their money better.

We hold contracts with the following product providers:

• 1. Standard Bank

Section 3A(2)(a) of the General Code of Conduct stipulates that every provider, other than a representative, must adopt, maintain and implement a conflict of interest management policy that complies with the provisions of the Act. The policy is to provide for mechanisms in place at Floatpays (Pty) Ltd to identify, mitigate and manage the conflicts of interest to which the Floatpays (Pty) Ltd is a party. This Conflict of Interest Management Policy is designed as prescribed in the General Code of Conduct for Financial Services Providers and Representatives as amended by Board Notice 58 of 2010 and Board Notice 146 of 2014.

Objective of the Policy

This Conflict of Interest Management Policy does not change our existing conflict of interest management procedures but intends to document them in a simple form as required by the Financial Services Board.

In terms of the Financial Advisory and Intermediary Services Act, 2002, Floatpays (Pty) Ltd is required to maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conflict of interest. Floatpays (Pty) Ltd has put in place a policy to safeguard its clients’ interests and ensure fair treatment of clients.

All providers, key individuals, representatives, associates and administrative personnel will commit to such policy and the processes will be monitored on an ongoing basis.

Floatpays (Pty) Ltd keeps and maintains a register in which all actual or potential conflicts are recorded.

Mission Statement on Conflict of Interest

Floatpays (Pty) Ltd is committed to ensuring that all business is conducted in accordance with good business practice. To this end Floatpays (Pty) Ltd conducts business in an ethical and equitable manner and in a way that safeguards the interests of all stakeholders to minimise and manage all real and potential conflicts of interests. Like any financial services provider, Floatpays (Pty) Ltd is potentially exposed to conflicts of interest in relation to various activities. However, the protection of our clients’ interests is our primary concern and so our policy sets out how:

• we will identify circumstances which may give rise to actual or potential conflicts of interest entailing a material risk of damage to our clients’ interests;
• we have established appropriate structures and systems to manage those conflicts; and
• we will maintain systems in an effort to prevent damage to our clients’ interests through identified conflict of interest.

Understanding the Definitions

Conflict of Interest

A conflict of interest may occur when in rendering a financial service to you we do not act objectively or do not render an unbiased or fair service to you or do not act in your interests, including but not limited to:

• A. A financial interest
• B. An ownership interests
• C. Any relationship with a third party.

A Financial Interest

Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, valuable consideration, other incentive, or valuable consideration (exceeding R1000 per annum) other than –

• A. An ownership interest
• B. Training, that is not exclusively available to a selected group of providers or representatives, on –
  • Products and legal matters relating to those products;
  • General financial and industry information;
  • Specialised technological systems of a third party necessary for the rendering of a financial service, but excluding travel and accommodation associated with that training.

An Ownership Interest

• A. Any equity or proprietary interest for which a fair value was paid on acquisition other
• B. Than such an interest held by a nominee;
• C. Includes any dividend, profit share or similar benefit derived from such interest.

Fair Value

Has the meaning assigned to it in the financial reporting standards adopted or issued under the Companies Act, 61 of 1973?

New Entrant

Is a person who has never been authorised as a financial services provider or appointed as a representative by any FSP.

Sign-On Bonus

Is any financial interest offered or received directly or indirectly, upfront or deferred, and with or without conditions, as an incentive to become a provider.

Here a financial interest includes but is not limited to a:

• A. Loan, advance, credit facility or any other similar arrangement; or
• B. Compensation for the
  • Potential or actual loss of any benefit including any form of income, or part thereof; or
  • Cost associated with the establishment of a provider's business or operations, including the sourcing of business, relating to the rendering of financial services.

What may we Give and Receive?

We confirm that we will only receive or offer financial interest from or to the aforesaid providers or other third party in the form of:

• (i) Commission authorized under the Long-term Insurance Act, 52 of 1998;
• (ii) Commission authorized under the Short-term Insurance Act, 53 of 1998;
• (iii) Commission authorized under the Medical Schemes Act, 131 of 1998;
• (iv) Fees under the aforesaid acts if these fees are reasonably commensurate to the service being rendered;
• (v) Fees for rendering a financial service in respect of which no commission or fees are paid as aforesaid, if those fees are specifically agreed to by you in writing and may be stopped at your discretion;
• (vi) Fees or remuneration for the rendering of a service to a third party, which fees are reasonably commensurate to the service being rendered;
• (vii) Subject to any other law, an immaterial financial interest;
• (viii) A financial interest for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid at the time of receipt thereof.

Remuneration Policy

Remuneration within Floatpays (Pty) Ltd is aligned to corporate strategy. Such remuneration adheres to principles of good corporate governance, as contained in the King IV Report. The remuneration policy of Floatpays (Pty) Ltd promotes and supports positive outcomes across the economic and social context in which the company operates. It promotes an ethical culture and responsible corporate citizenship. It further incorporates the principles of TFC. The Employees of Floatpays (Pty) Ltd are remunerated by means of monthly salaries. Total Remuneration includes the component of. Floatpays (Pty) Ltd are remunerated by means of an administration fee from Standard bank.

Processes and Internal Controls

Identification of Conflict of Interest

To adequately manage conflicts of interest we must identify all relevant conflicts timeously. In determining whether there is or may be a conflict of interest to which the policy applies, Floatpays (Pty) Ltd considers whether there is a material risk of damage to the client, taking into account whether Floatpays (Pty) Ltd or its representative, associate or employee:

• is likely to make a financial gain, or avoid a financial loss, at the expense of the client;
• has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client's interest in that outcome;
• has a financial or other incentive to favour the interest of another client, group of clients or any other third party over the interests of the client;
• receives or will receive from a person other than the client, an inducement in relation to a service provided to the client in the form of monies, goods or services, other than the legislated commission or reasonable fee for that service.

Our policy defines possible conflicts of interest as, inter alia:

• conflicts of interest between Floatpays (Pty) Ltd and the client;
• conflicts of interest between our clients if we are acting for different clients and the different interests conflict materially;
• conflicts of interest where associates, product suppliers, distribution channels or any other third party is involved in the rendering of a financial service to a client;
• storing confidential information on clients which, if we would disclose or use, would affect the advice or services provided to clients. We may only receive commissions authorised in terms of applicable legislation.

Floatpays (Pty) Ltd maintains an index of potential conflict risks, taking into consideration all business areas and income streams. The index is updated with all new conflicts identified, and to ensure completeness is reviewed on an annual basis. Apart from the register of actual conflict of interests, record must be kept of potential conflict of interest and closely monitored by the KI/assigned staff.

All employees, including internal compliance officers and management, are responsible for identifying specific instances of conflict and are required to notify the Key Individual of any conflicts they become aware of. The Key Individual will assess the implications of the conflict and how the conflict should be managed and act impartially to avoid a material risk of harming clients’ interests.

Measurement for avoidance and mitigation of Conflict of Interests

Create awareness and knowledge of applicable stipulations of the General Code of Conduct and relevant legislation relating to conflict of interest, through training and educational material.

Ensure understanding and adoption of conflict of interest policy and management measures by all employees, representatives, and associates. Carry out regular inspections on all commissions, remuneration, fees and financial interests proposed or received in order to avoid non-compliance.

Keep a register of conflicts of interest.

Once a conflict of interest has been identified it needs to be appropriately and adequately managed.

The Key Individual will assess each conflict, including whether the conflict is actual or perceived, what the value of the conflict or exposure is and the potential reputational risk. Compliance and management then agree on the controls that need to be put in place to manage the conflict.

Disclosure

Where there is no other way of managing a conflict, or where the measures in place do not sufficiently protect clients’ interests, the conflict must be disclosed to allow clients to make an informed decision on whether to continue using our service in the situation concerned. In all cases, where appropriate and where determinable, the monetary value of non-cash inducements will be disclosed to clients. The Key Individual will ensure transparency and manage conflict of interests. We at Floatpays (Pty) Ltd make use of the following disclosure documents.

• Record of Advice
• Contact Disclosure letter
• Insurance quotes

Publication

A copy of our Conflict of Interest policy is kept at our office and will be provided on the client’s request.

Declining to act

We may decline to act for a client in cases where we believe the conflict of interest cannot be managed in any other way.

Ongoing monitoring of Conflict of Interest Management

This policy will be reviewed annually and must be included in your annual FSCA compliance report, containing details “…on at least the implementation, monitoring and compliance with, and the accessibility of the conflict of interest management policy.”

Brian Marsh will be responsible for reviewing the conflict of Interest policy annually, this will be done in conjunction with our external compliance company (Masthead)

Brian Marsh will be responsible to ensure that when representatives deal with clients, that the clients of Floatpays (Pty) Ltd will be treated fairly at all times and keeping in mind from an business prospective we believe in quality over quantity and that clients must be able to make informed decision when it comes to products and advice given.

Training and Staff

All employees and representatives are required to read Board Notice 58 of 2010 together with Board Notice 146 of 2014 as well as this policy and to sign a statement to the effect that they have done so and fully understand the provisions of all three documents and the application thereof.

Comprehensive training on the Conflict of Interest policy will be provided to all employees and representatives as part of specific and/or general training on the FAIS Act. Training will be incorporated as part of all new appointees’ induction and refresher training provided on an annual basis.

The Key Individual Brian Marsh will conduct ad hoc checks on business transactions to ensure the policy has been complied with.

The Compliance Officer will include monitoring of the Conflict of Interest policy as part of his/her general monitoring duties and will report thereon in the annual compliance report.

The compliance function is outsourced to an external Compliance company with no shareholding in this FSP. The Compliance practice functions objectively and sufficiently independently of the FSP and avoids conflicts of interest.

Non-compliance will be subject to disciplinary procedures in terms of FAIS and employment conditions and can ultimately result in debarment or dismissal as applicable.

Avoidance, limitation or circumvention of this policy via an associate will be deemed non-compliance.

This policy shall be reviewed annually and updated if applicable.

Representative Incentives

We confirm we will not offer any financial interest to our key individuals or representatives for-

• Favouring quantity of business over quality of service; or
• Giving preference to a specific product supplier where more than one supplier can be recommended to a client; or
• Giving preference to a specific product of a supplier where more than one product of that supplier can be recommended.

Sign-On Bonus

Floatpays (Pty) Ltd being a Category I provider that is authorised or appointed to give advice and perform intermediary services, we confirm that we do not receive a sign-on bonus from any person.

Registers

With regard to existing third-party relationships, being the product suppliers listed in our Contact Stage Disclosure letter, we confirm that we do not have an ownership interest or are subject to exclusive training nor are there any other circumstances which could lead to a potential conflict of interest. Should any conflicts arise with regard to any of these, prior to entering into any business transaction with you, we undertake to disclose these in the registers below.

Floatpays (Pty) Ltd has implemented the registers below:

• Nature and Extent of Ownership interests
• Financial Interest Received
• Nature and Extent of Business Relationships

At Floatpays (Pty) Ltd we believe in open, honest and transparent interactions with our clients. During our business activities, situations may arise whereby we may become entitled to certain financial interests supplied by external parties in addition to the commission that we earn or the fees that we charge. At Floatpays (Pty) Ltd we take pride therein that our advice is objective and free of external influence, but wish to disclose to you, our valued client, that we have received the following financial interests and wish to disclose the value and the reason for receiving the financial interests.

We do not believe that the financial interests received constitute a conflict of interest but would gladly address any concerns you may have. Please refer to Annexure 1 to this register for a complete list.

We may also enjoy a preferred status with one or more of the product supplier companies with whom we hold contracts. This status allows us and our customers certain benefits when dealing with these providers.

We similarly make every effort to ensure that our advice is not influenced by our status with any one product supplier, but believe that disclosure of these business relationships and the benefits they include, allow you to make informed decisions. Please refer to Annexure 2 for complete details of these business relationships.

In accordance with the General Code of Conduct we are required to disclose any ownership interest we may have in external parties. These are contained in Annexure 3.

Masthead Membership

We are proud to state that we are members of the Masthead Financial Advisors Association. This association is a voluntary body of independent financial advisors, regulated by its own constitution and code of conduct. This code of conduct requires its members to adhere to ethical and professional standards and to act in the best interest of our clients.

As members of the Association we may become entitled to certain discounts by virtue of our membership.

The Masthead Financial Advisors Association holds 25% of the issued share capital in Masthead (Pty) Ltd, which is a separate legal entity that specialises in providing support services to independent financial services intermediaries. We have contracted with Masthead (Pty) Ltd to deliver certain services to us, including compliance services. For these services we pay a monthly service fee.

For the sake of full disclosure, please note that we derive no financial interest from Masthead other than services that are paid for.

Annexure 1

Financial Interest Received

Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, valuable consideration, other incentive or valuable consideration (exceeding R1000 per annum) other than –

• A. An ownership interest;
• B. Training, that is not exclusively available to a selected group of providers or representatives, on –
  • a. Products and legal matters relating to those products;
  • b. General financial and industry information;
  • c. Specialised technological systems of a third party necessary for the rendering of a financial service, but excluding travel and accommodation associated with that training.

Annexure 2

Business Relationship / Association

List the different product suppliers, outsource agreements and referral agreements you have with each company, and any associate in relation to a person

Annexure 3

Ownership Interest

Any equity or proprietary interest, for which fair value was paid by the owner at the time of acquisition, other than equity or a proprietary interest held as an approved nominee on behalf of another person. This includes any dividend, profit share or similar benefit derived from that equity or ownership interest.