Aequam Capital

Scope of the procedure

In accordance with the terms of Articles L. 533-18 of the French Monetary and Financial Code and 314-75 of the General Regulations of the “Autorité des marchés financiers”, Aequam Capital establishes and implements a policy of better selection of intermediaries to whom orders resulting from its investment decisions are transmitted (order executors, derivative counterparties, futures compensators) in order to comply with the obligation to obtain the best possible result for clients or managed funds.

In accordance with the terms of Article 314-75 of the RG AMF, this policy of better selection of intermediaries is reviewed annually and, in any event, "whenever there is a significant change affecting the provider's ability to continue to obtain the best possible result for its clients or the collective investment mentioned in Article 311-1 A that it manages".

Intermediaries selection

Business relationship and file constitution

Before working with an intermediary, Aequam Capital insures that the intermediary concerned has the authorization and capacity to provide the services necessary to meet the needs of the asset manager portfolio in the context of order execution. Aequam Capital also ensures that the intermediary concerned is bound by a best execution obligation towards the asset manager portfolio either because it is itself subject to a best execution obligation and agrees to categorize Aequam Capital as a professional client, or because it contractually undertakes to comply with the best execution obligation.

Selection criteria

Working with a new broker may result from a decision by a Manager, validated by the Executive Committee.

The rating criteria are:

  • Pricing policy
  • Quality of order execution,
  • Responsiveness and resolution delays in the event of an anomaly or malfunction,
  • Tools provided,
  • Quality of the execution policy implemented.

The criteria are scored from 0 to 5.

Before working with an intermediary, Aequam Capital insures that the intermediary concerned has the authorization and capacity to provide the services necessary to meet the needs of the asset manager portfolio in the context of order execution. Aequam Capital also ensures that the intermediary concerned is bound by a best execution obligation towards the asset manager portfolio either because it is itself subject to a best execution obligation and agrees to categorize Aequam Capital as a professional client, or because it contractually undertakes to comply with the best execution obligation.

Annual review of intermediaries

At least annually, management reviews all these rating sheets at an Executive Committee meeting and reconciles them with the volume of business granted to each intermediary.

This annual review is the subject of a report in which the intermediaries excluded and those whose business volume is maintained or modified are mentioned.

Aequam Capital

Preamble

The UCITS V Directive focused on the remuneration policies of the asset manager applicable to "categories of personnel whose professional activities have a substantial impact on the risk profile of the UCITS managed" in order to ensure sound risk management and to allow a control of risk-taking behavior of staff members.

In accordance with the UCITS V Directive, Aequam Capital has implemented a remuneration policy and practices (the "Remuneration Policy") in order to ensure a sound and effective risk management, which was decided, in an extensive manner, to make applicable to all its permanent employees in order to prevent, manage and avoid conflict of interest situations and incompatible or inconsiderate risks with regard to the interests of investors in the UCITS and/or AIF under management.

The Compensation Policy considers Aequam Capital's organizational and operational requirements, as well as the nature, scope and complexity of its activities.

A paper version of this document is available free of charge on request.

Guiding Principles

Aequam Capital relies on a number of guidelines to ensure that the level of total variable compensation allocated to all employees leads to an alignment of interests between the asset manager and investors in the UCITS and/or AIF under management.

These guiding principles are as follows:

  • the remuneration policy is compatible with sound and effective risk management and does not promote or encourage risk-taking that would be incompatible, inconsiderate or excessive in relation to the risk profiles of the UCITS and/or AIF under management, their regulations or the instruments of incorporation of such UCITS and/or AIF;
  • the remuneration policy is in line with the economic strategy, objectives, values and interests (i) of the asset manager, (ii) of the UCITS and/or AIF under management and (iii) of the investors invested in these UCITS and/or AIF, and includes measures to detect, prevent, manage and avoid any conflict of interest;
  • the remuneration policy and its guiding principles are adopted and reviewed annually by a remuneration committee. This committee is also responsible for the effective implementation of these guidelines, which it oversees;
  • the guaranteed variable remuneration only occurs on an exceptional basis when a new member of staff is hired, and only during the first year;
  • variable remuneration is only paid or vested if it is compatible with the financial situation of the asset manager;
  • employees are required not to use personal hedging strategies or compensation or liability insurance that could be inconsistent with the risk alignment embedded in their compensation agreements;
  • variable remuneration is not paid through instruments or methods that facilitate the circumvention of requirements established by the existing regulatory framework.

Implementation of the guiding principles of the remuneration policy

The application of the above guiding principles results in:

  • Identification of the scope of the employees concerned: in order to ensure consistency of treatment, the management of Aequam Capital has decided to subject its remuneration policy to all the staff of the asset manager;
  • The annual written evaluation of all Aequam Capital employees sets the qualitative objectives to be achieved, which are decisive for future compensation and promotion:
  • Identification of the types of remuneration paid by the asset manager, distinguishing between fixed and variable remuneration;
  • Definition of qualitative criteria for the allocation of variable remuneration: it should be specified that the variable remuneration of employees is not directly linked to the performance of the UCITS and/or AIF managed but only to the quality of their work over the long term and their involvement in cross-cutting tasks;
  • The determination of the terms and conditions for the payment of variable remuneration (in year N or deferred);
  • Definition of the identity of the persons responsible for the allocation of remuneration: Aequam Capital's Executive Committee is responsible for setting up remuneration decisions. It carries out an annual review of the various elements of the remuneration policy.
Aequam Capital

Scope

In accordance with the requirements of Article 321-40 of the RGAMF, Aequam Capital has established an efficient and transparent procedure for the reasonable and prompt handling of complaints from existing or potential clients of the asset manager.

A complaint is considered to be a written or oral statement recording the dissatisfaction of a professional or non-professional client with the asset manager.

A request for information, advice, clarification, service or provision is not a claim.

Complaints handling process

Any complaint may be sent to Aequam Capital, 1 rue de la Bourse 75002 Paris, France or by email: info@aequamcapital.com

The asset manager will acknowledge receipt of the complaint within a maximum of ten working days from receipt of the complaint, unless the response itself is provided to the client within that period. Unless special duly justified circumstances arise, it will provide a response to the client within two months following the receipt of the complaint.

In the event of persistent disagreement, the client may contact a mediator, including the AMF mediator. The AMF contact details are as follows:
Autorité des Marchés Financiers
Madame Marielle Cohen-Branche, AMF mediator
17, place de la Bourse 75082 Paris Cedex 02

The AMF mediation request form and the mediation charter are available on the websitehttp://www.amf-france.org

GDPR

In the context of processing claims received on the basis of the aforementioned regulations, Aequam Capital collects personal data such as the identity of the person making the complaint, his or her contact details and the purpose or context of the complaint, as it refers to personal data such as the economic situation of the person concerned. Failure in providing all or part of the necessary personal data may result for the plaintiff of being totally or partially deprived of the benefit of the regulatory provisions on the processing of complaints.

The controller of this process is Aequam Capital, represented by its Chairman, who may be reached with the contact details provided in this document.

Data are kept for at least five years in accordance with regulatory requirements. Persons making a complaint are informed that their rights of access, rectification, deletion, limitation of processing, objection and opposition may be exercised by written communication to the contact details given in this document, and of the existence of the right to make a complaint with a supervisory authority.

Aequam Capital

Scope of the voting policy

In accordance with the requirements of Articles 314-100 and following the General Regulations of the Autorité des marchés financiers (AMF), Aequam Capital has established a voting policy, updated as necessary, which sets out the conditions under which it intends to exercise the voting rights attached to the securities held by the funds of which it manages.

Organisation to exercise voting rights

Arnaud Chrétien is in charge of examining and analyzing the resolutions submitted. He is entitled to decide which votes to exercise.

Selection criteria

Aequam Capital will exercise voting rights at the general meetings of companies in which it is a shareholder, in compliance with the existing regulations and in the interests of unitholders.

Aequam Capital may not exercise its voting rights if the holding threshold for the portfolios managed is less than 5% of the capital and if the portfolios do not hold at least €1 million.

Aequam Capital will consider on a case-by-case basis the resolutions subject to the general meetings and in particular:

  • a) Decisions leading to an amendment of the statutes;
  • b) Approval of the accounts and allocation of the result;
  • c) Appointment and dismissal of social bodies;
  • d) Agreements known as regulated agreements;
  • e) Programs to issue and repurchase equity securities;
  • f) The appointment of statutory auditors;
  • g) Any other specific type of resolution that the asset manager wishes to identify;

Identification, prevention and management of conflicts of interest

Aequam Capital has implemented a procedure to prevent and manage conflicts of interest.

Current method for exercising voting rights

On a case-by-case basis, Aequam Capital will exercise its voting rights by attending general meetings, voting by proxy or by mail.

Information

The voting policy is made available free of charge to unitholders of the fund upon request. In accordance with Article 314-101 of the AMF General Regulations, at the AMF's request, the abstentions or votes cast on each resolution as well as the reasons for these votes or abstentions are communicated to the AMF.

In addition, Aequam Capital makes available to any unitholder of the fund who requests information related to the exercise, by the asset manager, of voting rights on each resolution of an issuer presented to the general meeting as soon as the proportion of the securities held by the fund managed by the asset manager, reaches the holding threshold set out in this document.

In addition, Aequam Capital prepares, within four months of the end of its financial year, a report on the exercise of voting rights for the past year, if applicable.

Aequam Capital

Preamble

Environment

Aequam Capital is committed to the environmental impact of companies and their ability to offer products and services that meet environmental challenges. Environmental issues can include the treatment of carbon emissions, pollution, waste, and water use at the company level.

Social

Aequam Capital is committed to the impact of companies on all their stakeholders (suppliers, employees, consumers) and the growing expectations of investors in terms of social liability. Social issues can include all types of employment abuse, indicators of employee turnover, diversity, health and safety at work, income distribution, and product safety.

Governance

Aequam Capital is sensitive to the added value provided by companies that promote ethical governance. Governance issues may include any tendency towards fraud and corruption, government involvement and impact on the management of the company, the independence of the board of directors, executive compensation, and anti-competitive practices.

Policy

In accordance with Article L. 533-22-1 of the Monetary and Financial Code, Aequam Capital must inform investors on how ESG criteria are considered in the management process.

Although highly sensitive to these criteria, they are not used as a systematic filter for Aequam Capital's management and risk management decisions.

Aequam Capital

Policy Scope

In accordance with Articles 321-46 and following the General Regulations of the Autorité des marchés financiers (AMF), the purpose of this procedure is to define the measures implemented by Aequam Capital to prevent, manage and deal with situations of conflicts of interest arising in the course of its business:

  • between Aequam Capital and its clients, whether physical or legal persons; or
  • between one or more employees of Aequam Capital and the clients who are physical or legal persons of the asset manager portfolio; or
  • between two or more clients, physical or legal persons of Aequam Capital.

Any investor who acquires shares in a fund managed by Aequam Capital is considered to be a client of Aequam Capital.

This procedure is intended to apply to all Aequam Capital employees (employees, temporary staff, interns and, in general, any person made available and placed under the authority of the asset manager).

Conflicts of interest identification

In the context of Aequam Capital's activities, several situations are likely to create conflicts of interest to harm the client's interests and are defined in Article 321-47 of the General Regulations of the Autorité des marchés financiers (AMF).

There are three types of potential conflicts of interest:

  • conflicts of interest involving several investment vehicles managed or advised by Aequam Capital;
  • conflicts of interest involving Aequam Capital and investment vehicles managed or advised;
  • conflicts of interest involving Aequam Capital employees.

Conflicts of interest may include:

  • financial management: fairness of holders, transaction between portfolios;
  • direct, indirect compensation paid or received: transparency of information to shareholders, choice of intermediaries, benefits, etc.
  • the organization of Aequam Capital: separation of functions, compensation of employees;
  • transactions on behalf of Aequam Capital, its managers and employees;
  • the primacy of the client's interest.

Aequam Capital takes all necessary measures to identify the sources of potential conflicts of interest.

Conflicts of interest prevention

Aequam Capital is an entrepreneurial and independent asset manager whose activity is the management on behalf of third parties. The activity of own-account management is limited to the financial investments of the asset manager.

The prevention of conflicts of interest within Aequam Capital is based on organizational measures as well as on procedures and controls.

Organizational measures

Separation of functions

In order to guarantee the interests of its clients, all decisions are taken independently and Aequam Capital and its employees ensure equal treatment between them.

Aequam Capital has set up an organization that separates "risky" functions with regard to conflicts of interest. Thus, the management, middle office, valuation (outsourced), risk control and marketing teams are clearly separated.

The compliance and internal control function is completely independent through its outsourcing and carries out permanent monitoring of the activities in order to ensure that internal control procedures are appropriate.

Circulation, exchange and protection of information

The computer system set up with independent networks between the teams, with limited access according to the employees, makes possible to limit authorizations only to the persons concerned by some. Barriers to the circulation of information intended to prevent the circulation of confidential or privileged information are thus put in place in order to separate activities likely to generate conflicts of interest (activities which are sources of non-public information or of conflicts of interest between them). In addition, specific operational procedures make possible to manage the circulation of confidential or privileged information and to remind employees on insider or confidentiality lists of their obligations of discretion and abstention with regard to these information (see collection of procedures, market abuse procedures and personal transactions).

Procedures and controls

The measures and controls adopted are designed to prevent and manage conflicts of interest and include the following provisions.

An internal conflict of interest management policy including instructions that employees must comply with in order to identify, prevent and manage conflicts of interest

The AFG's internal and external ethics rules, completed with numerous targeted application procedures, control the risk that Aequam Capital staff take advantage of information held to the detriment of clients or act with interests that could be opposed to those of clients (procedure for making employees aware of the rules of ethics, personal transactions procedures, gift policy, market abuse procedure, etc.).

Strict procedures and rules to govern order processing and the primacy of the client's interest

Aequam Capital strictly respects the operating rules of the financial markets and refrains from any infringement of equal treatment of orders.

In particular, orders transmitted in the market are pre-allocated and time-stamped, and Aequam Capital does not accept subscription-repurchase orders transmitted by clients after the centralisation deadline.

Strict procedures and rules in the better selection policy

The asset manager requires that all intermediaries involved in the execution of orders have been selected on the principle of the primacy of the client's interest as set out in Article 321-100 of the General Regulations of the Autorité des marchés financiers (AMF) and of the best selection, and have been approved by the managers. The criteria used to draw up this list are specified in the better selection policy.

Conflicts of interest management

Handling situations of potential or actual conflicts of interest

Any Aequam Capital employee who notices a potential or actual conflict of interest situation must immediately inform the RCCI. The RCCI will then have to analyze the situation and indicate to the employee concerned the behavior to be adopted.

Maintenance of the conflict of interest register

In accordance with the provisions of Article 321-50 of the General Regulations of the Autorité des marchés financiers (AMF), Aequam Capital sets up a register recording the activities carried out by or on behalf of the portfolio management company for which a conflict of interest involving a material risk of prejudice to the interests of one or more of its clients has occurred or is likely to occur.

The register shall identify all potential or actual conflicts of interest and the measures to deal with such conflicts of interest that have been put in place.

Clients information

When a situation of potential conflict of interest is identified and the measures put in place by the asset manager are not sufficient to ensure, with reasonable certainty, that the risk of harming the interests of clients will be avoided, the asset manager's directors shall be informed as soon as possible so that they can take any measures necessary to ensure that the asset manager’s portfolio will in all cases act in the best interests of the UCITS or the AIF and its unit-holders.

Similarly, if Management considers, on the advice of the RCCI, that a conflict of interest has not been resolved, the affected unitholders or clients will be informed on a physical device by Aequam Capital.