Conflict of Interest Policy

Conflict of Interest Management Policy

For The Unlimited Group (PTY) Limited ("The Unlimited")

1. Policy Statement

The Unlimited’s shareholders, its employees, agents, contractors, suppliers and any other persons acting on behalf of The Unlimited are required to familiarise themselves with the policy’s requirements and undertake to comply with the stated processes and procedures.

2. Policy Adoption

This policy and the processes contained in it have been approved by the Executive Directors and at least one Key Individual of The Unlimited.

3. Definitions

3.1 Conflict of Interest means any situation in which The Unlimited or a representative or Key Individual has an actual or potential interest that may, in rendering a financial service to a client:
• influence the objective performance of his, her or its obligations to that client; or
• prevent The Unlimited or the representative from rendering an unbiased and fair financial service to that client, or from acting in the interest of that client,
including but not limited to a financial interest, an ownership interest; any relationship with a third party.
3.2 Financial Interest means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than:
• an ownership interest;
• 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.
• a qualifying enterprise development contribution to a qualifying beneficiary by a provider that is a measured entity.
3.3 Immaterial Financial Interest means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by:
• a representative for that representative’s direct benefit;
• The Unlimited, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representatives.
3.4 Ownership Interest means
• 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, and
• includes any dividend, profit share or similar benefit derived from that equity or ownership interest.
3.5 Third Party means
• a product supplier or another provider;
• an associate of a product supplier or a provider;
• a distribution channel;
• any person who in terms of an agreement or arrangement with a person referred to above provides a financial interest to a provider or its representatives.
3.6 Associate means
• in relation to a natural person:
• a person who is recognised in law or the tenets of religion as the spouse, life partner, or civil union partner of that person
• a child of that person, including a stepchild, adopted child and a child born out of wedlock, a parent or stepparent of that person
• a person in respect of which that person is recognised in law or appointed by a Court as the person legally responsible for managing the affairs of or meeting the daily care needs of the first mentioned person
• a person who is a spouse, life partner or civil union partner of a person referred to above
• a person who is in a commercial partnership with that person
• in relation to a juristic person:
• which is a company, means any subsidiary or holding company of that company, any other subsidiary of that holding company and any other company of which that holding company is a subsidiary
• which is a close corporation registered under the Close Corporations Act, means any member thereof as defined in section1 of that Act
• which is not a company or a closed corporation, means another juristic person which would have been a subsidiary or holding company of the first-mentioned juristic person:

• had such first-mentioned juristic person been a company, or
• in the case where that other person, too, is not a company, had both the first-mentioned juristic person and that other person been a company

• means any person in accordance with whose directions or instructions the board of director of or, in the case where such juristic person is not a company, the governing body of such juristic person is accustomed to act.
• in relation to any person:
• means any juristic person of which the board of directors or, in the case where such juristic person is not a company, of which the governing body is accustomed to act in accordance with the directions or instructions of the person first-mentioned in this paragraph
• includes any trust controlled or administered by that person

4. Purpose of the Policy

The Unlimited is required to adopt, maintain and implement a conflict of interest management policy which complies with the provisions of the Financial Advisory and Intermediary Services Act, 37 of 2002. In addition to the policy, both The Unlimited and its representatives must avoid, and where this is not possible, mitigate, any conflict of interest between themselves and customers.
We are committed to acting in the best interests of our customers and to avoiding conflicts of interests in relation to the provision of financial services. Where we are unable to avoid a conflict of interest, we will take all necessary precautions to ensure that any actual or potential conflict of interest is mitigated, and adequately disclosed to our customers.
We have adopted this Conflict of Interest Management policy to assist in the effective management of any actual or potential conflicts of interest that may arise when we provide financial services.
The purpose of the Conflict of Interest Management Policy is to:
• Document the internal controls and mechanisms used in the identification of conflicts of interest
• Document the measures taken to avoid conflicts of interest, and where avoidance is not possible, the mitigation measures
• Document how we ensure the proper disclosure of any conflicts of interest; and
• Communicate the consequences of non-compliance with the policy.

5. Identifying a Conflict of Interest

5.1 Individual Identification
Responsibility for the identification of a conflict of interest rests with the shareholders, representatives, employees and key individuals of The Unlimited who must, throughout the process of rendering a financial service to a customer, apply his or her mind to answering the following questions:
• is there any situation that exists that influences the objective performance of my obligations to my customer?
• is there any situation that exists that prevents me from rendering an unbiased and fair financial service to my customer?
• is there any situation that exists that prevents me from acting in the best interest of my customer?
If the answer to all three questions is “No”, then there is no conflict of interest associated with the financial service.
If the answer to any one of the three questions is “Yes”, then the relevant person must answer the following additional questions:
• is the situation caused as a result of an actual or potential relationship with a third party? (see definition of “third party”)
• is the situation caused by an actual or potential financial or ownership interest? (see definition of “financial interest” and “ownership interest”)
If the answer to any one of these questions is “Yes”, an actual or potential conflict of interest will have been identified.

5.2 Further Guidance on Identifying a Conflict of Interest

The definition of a Conflict of Interest incorporates the following terminology:
• …….…..influence the “objective performance” of his, her or its obligations to that client….
• ………...prevent a provider or representative from rendering an “unbiased and fair financial service” to that client…..
• ………..including but not limited to a “financial interest”
It is generally understood that the word “objective” refers to a situation where an individual’s personal feelings or opinions are completely removed from the equation. “Objective performance” of obligations therefore implies a situation where financial services are rendered without any untoward influences.
The word “bias” or “biased” is understood to mean a form of prejudice towards a particular person or viewpoint, whereas the word “fair” or “fairness” indicates a situation of just circumstances or being treated on an equal footing. An unbiased financial service therefore implies a financial service that does not lend itself to a particular persuasion, where no reasonable justification for such persuasion can be found. Similarly, a fair financial service implies a situation where the same conclusion or outcome will consistently present itself given the exact same set of circumstances.
The Unlimited and its representatives may only receive or offer the following “financial interest” :
• commission authorised by relevant legislation
• fees authorised by legislation provided they are reasonably commensurate to the service being rendered
• fees or remuneration for the rendering of a service to a third party, which are reasonably commensurate to the service being rendered
• an immaterial financial interest (subject to any other law)
• a financial interest, not referred to above for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid by The Unlimited at the time of receipt thereof
The Unlimited will not offer any financial interest to its representatives:
that is determined with reference to the quantity of business secured for The Unlimited without also giving due regard to the principles and values contained in The Unlimited's brand framework.
Representatives of The Unlimited are not permitted to make recommendations to customers regarding the product or product supplier most suitable for the customer's needs and objectives as The Unlimited does not provide advice.
5.3 Internal Controls to Identify Conflicts of Interest
The Unlimited has implemented the following internal controls to identify actual or potential conflicts of interest that may arise:
• The Chief Operations Officer (COO) will review contracts held with third parties to assess whether the contractual relationship in any way influences The Unlimited’s objective performance towards its customers, its ability to render fair and unbiased financial services towards its customers or its ability to act in the best interest of the customer and provides feedback thereon to the relevant parties,
• The COO will, where required, review relationships where an ownership interest exists between The Unlimited and a third party to determine whether the relationship in any way influences The Unlimited’s objective performance towards its customers and its ability to render fair and unbiased financial services towards its customers,
• A Conflict of Interest survey is conducted annually whereby relevant personnel are required to disclose any conflicts of interest,
• A list of The Unlimited’s associates is attached at the end of this document (Annexure A).
• A list of all third parties in which The Unlimited holds an ownership interest is also attached at the end of this document (Annexure B).
• A list of all third parties that hold an ownership interest in The Unlimited is attached (Annexure C).
• The Unlimited maintains a Gift Register onto which details of all gifts received from a third party with an estimated value of R500 or more are recorded. The Gift Register is available upon request.
• All relevant personnel are required to immediately disclose in writing to The Unlimited’s COO or Compliance Manager, any actual or potential conflicts of interest as soon as they become aware of such situation.

6. Avoiding and Mitigating a Conflict of Interest

Once an actual or potential conflict of interest has been identified, the following procedures will be followed in order to determine whether the conflict of interest is avoidable:

• The COO will, together with the Compliance department and other relevant executive management, evaluate the actual or potential conflict of interest in an open and honest manner after having considered all relevant information to determine whether The Unlimited can avoid the actual or potential conflict of interest.
• They will consider the following possible outcomes prior to a finding in favour of unavoidability:
• The possible negative impact it will have on The Unlimited’s customers where the actual or potential conflict of interest is deemed to be unavoidable, and
• The possible negative impact it will have on the integrity of the financial services industry where the actual or potential conflict of interest is deemed to be unavoidable.
• The possible negative effect it will have on business operations, where an employee is providing services to a competitor or another entity during their tenure at The Unlimited.
• Where they have determined that the actual or potential conflict of interest is in fact avoidable, they will remove the underlying cause or situation that results in the actual or potential conflict of interest as soon as reasonably possible. Any immediate negative impact or prejudice towards customers pending the removal of the actual or potential conflict of interest will be kept to a minimum and the reasons why the actual or potential conflict of interest was determined to be avoidable will be recorded and retained by the COO and Compliance.
• Where the COO together with other relevant executive management has determined that the actual or potential conflict of interest is unavoidable, they will determine the measures that will be implemented to mitigate the actual or potential conflict of interest as far as reasonably possible, as well as confirm that such measures are implemented and effective in mitigating the conflict, and the reasons why the actual or potential conflict of interest is considered to be unavoidable will be recorded and retained by the COO and Compliance.

7. Disclosure of Conflicts of Interest

The Unlimited recognises that disclosure is an integral part of managing conflicts of interest and is committed to ensuring that customers are informed about actual or potential conflicts of interest in relation to the provision of financial services by The Unlimited. We undertake to:

• Disclose to customers any conflict of interest (this is done in our customer communications as well as in this policy),
• Disclose the nature of any relationship or arrangement with a third party that gives rise to a conflict of interest in enough detail to enable customers to understand the exact nature of the relationship or arrangement and the conflict of interest (contained in this policy),
• Where necessary, explain the measures taken to avoid or mitigate the conflict,
• Disclose any ownership interest or financial interest, other than an immaterial financial interest (contained in this policy), and
• Refer people where required to our Conflict of Interest Management Policy on our website at www.theunlimited.co.za or, for Internal staff, to Unbox (The Unlimited’s internal shared site on Microsoft Teams).

8. Compliance Measures

The measures implemented towards ensuring continued compliance with the Conflict of Interest Management Policy rests with the shareholders, although The Unlimited’s appointed Compliance Officer will also monitor it on an ongoing basis.
The Unlimited has adopted the following internal controls and processes:
• The Conflict of Interest Management Policy will be published on The Unlimited’s website as well as be available for inspection upon request at our offices;
• All relevant personnel will be reminded of their disclosure responsibilities at least annually (typically in the annual survey);
• Relevant personnel, and where appropriate, associates shall be made aware of the contents of the Conflict of Interest Management Policy and provided with training and educational material where deemed appropriate;
• Where an employee or representative has any concerns about whether there may be an actual or potential conflict of interest they must refer their concern/question to The Unlimited’s Compliance Officer;
• The lists annexed to the Conflict of Interest Management Policy shall be reviewed annually;
• A Gift Register shall be maintained by the Compliance department, and all gifts received from third parties with an estimated value of R500 or more shall be recorded in it - to do so please email RiskCompliance2@theunlimited.co.za within 10 days of receiving the gift;
• Appropriate disclosures shall be made to customers in the relevant products Disclosure Notice regarding this policy and where it may be accessed;
• The executive leadership shall ensure that the Conflict of Interest Management Policy is reviewed and approved by the Board at least annually and, where necessary, updated to ensure that it remains effective.

9. Consequences of Non-Compliance

Where there is reason to believe that an employee or representative has failed to disclose an actual or potential conflict of interest via the proper communication channels, The Unlimited will investigate and take any appropriate steps it deems necessary to limit any financial prejudice that may be suffered by themselves, their customers or any third party.

Where an investigation concludes that an employee or representative has indeed failed to disclose an actual or potential conflict of interest, The Unlimited shall immediately take appropriate disciplinary steps and corrective actions against such employee or representative. Any failure to comply with the Conflict of Interest Management Policy will be considered a serious form of misconduct and result in possible dismissal.

10. Annexure A: List of Associates

In terms of Section 3A(2)(b)(iii) of the General Code of Conduct, a Conflict of Interest Management Policy must include a list of all The Unlimited’s associates.

Ambledown Financial Services – The Unlimited Group (Pty) Ltd is 50.1% owned by ZABAWA Holdings (Pty) Limited. ZABAWA Holdings also owns 50% of Ambledown Holdings (Pty) Limited, which in turn owns 100% of Ambledown Financial Services (Pty) Limited. Ambeldown Financial Services is the Underwriting Management Agent of a Gap product offered by The Unlimited. This is not deemed to be a conflict of interest for the following reasons:

• The Unlimited only offers gap products to customers where Ambledown Financial Services is the underwriting management agent.

• Sales agents are unable to choose which gap product to offer customers – they are limited to only offering gap products of a single insurer, with Ambledown Financial Services acting as the underwriting management agent.

11. Annexure B: Ownership Interests Held by The Unlimited

In terms of Section 3A(2)(b)(v) of the General Code of Conduct, a Conflict of Interest Management Policy must include the names of any third parties in which the provider holds an ownership interest.

The Unlimited Group (Pty) Limited does not own an Ownership Interest in other entities

12. Annexure C: Ownership Interest Held in The Unlimited

In terms of Section 3A(2)(b)(vii) of the General Code of Conduct, a Conflict of Interest Management Policy must include the names of any third parties that holds an ownership interest in The Unlimited.

ZABAWA Holdings (Pty) Limited owns 50.1% of The Unlimited Group (Pty) Limited. The Unlimited Group International (Pty) Limited owns 49.9% of The Unlimited Group (Pty) Limited. The shareholders are not authorised financial service providers, or registered or licensed insurers.

13. Annexure D: Type of Financial Interest and Entitlement Thereto

In terms of Section 3A(2)(b)(ii), a Conflict of Interest Management Policy must specify the type of financial interest that the provider will offer a Representative and the basis on which a Representative will be entitled to such a financial interest. The Conflict of Interest Management Policy must also include a motivation regarding how the financial interest complies with sections 3A(1)(b) and 3A(1)(bA).

Form of Financial Interest Section 3A(1)(a)(i) – (vii) Basis for entitlement to Financial Interest Compliance with Sections 3A(1)(b) and 3A(1)(bA)

Commission authorised under the Long-term Insurance Act, 1998 (Act No. 52 of 1998) or the Short-term Insurance Act, 1998 (Act No. 53 of 1998). The Unlimited is entitled by virtue of intermediary agreements with its insurers to earn commission.

No commission is paid to the representatives as they are remunerated by a salary. Their salary may contain a percentage that is unlocked through achievement of KPI’s. In an effort to ensure fair outcomes for customers, The Unlimited has implemented measures to mitigate conflicts by the representatives in terms of their remuneration by paying a fixed salary and by monitoring that specific service standards are achieved in respect of customers. The Unlimited also has a mature quality assurance department that monitors the quality of calls

Commission authorised under the Medical Schemes Act, 1998 (Act No. 131 of 1998). Not applicable Not applicable

Fees authorised under the Long-term Insurance Act, 1998 (Act No. 52 of 1998) or the Medical Schemes Act, 1998 (Act No. 131 of 1998). Not applicable Not applicable

Fees for the rendering of a financial service in respect of which commission or fees referred to above is not paid, if

• The amount, frequency, payment method and recipient of those fees and details of the services that are to be provided by the provider or its representatives in exchange for the fees are specifically agreed to by a client in writing; and

• Those fees may be stopped at the discretion of that client. Not applicable Not applicable

Fees or remuneration for the rendering of a service to a third party. The FSP receives fees. These are not paid to the representatives. The FSP has put measures in place to ensure that:

(i) those financial interests are reasonably commensurate with the service being rendered, taking into account the nature of the service and the resources, skills and competencies reasonably required to perform it;

(ii) the payment of those financial interests does not result in the FSP being remunerated more than once for performing a similar service;

(iii) any actual or potential conflicts between the interests of customers and the interests of the FSP are effectively mitigated; and

(iv) the payment of those financial interests does not impede the delivery of fair outcomes to customers

14. Examples of Possible Instances Where a Conflict of Interest May Arise / Exist

1. An employee owning shares or holding debt or other proprietary interests in any third party or associated company.

2. Holding office, serving on the board, participating in management, or being otherwise employed (or formerly employed) with any third party or associated company.

3. An employee receiving remuneration of any type whether commission or otherwise for services from another person or company.

4. An employee using The Unlimited’s time, personnel, equipment, supplies, or goodwill for purposes other than approved activities, programs, and purposes.

5. An employee receiving gifts for birthdays and other special occasions from suppliers/customers;

6. An employee receiving money, vouchers, or anything that can be converted to money from any other person or company for ‘selling’ specific services or products whether in pursuance of the employee’s occupation or otherwise;

7. An employee being invited to lunches/dinners/shows and other entertainment events by suppliers;

8. An employee receiving or accepting special travel or holiday facilities at discounted prices or as an award for providing leads or business to another company;

9. An employee providing leads to businesses owned by family and friends, whether for reward or otherwise;

10. An employee distributing products and/or services provided by businesses owned by family and friends for reward or otherwise.