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Banco BPI general policy concerning conflicts of interest

I. Introduction

Conflicts of interest, either real or potential, are inherent to the services provided by Banco BPI, both in the banking business as in financial intermediation

It is therefore necessary to adopt measures intended to manage the risk of such conflicts resulting in inadequate action by the Bank vis-à-vis its Clients, namely on the part of its Employees.

The principles and procedures stipulated in the Policy are inspired by the commitment undertaken by Banco BPI, as an entity of the CaixaBank Group, to act with diligence and to ensure compliance with the applicable legislation as well as with the Group's guiding principles: respect, integrity, transparency, excellence, professionalism, confidentiality and corporate responsibility, also enshrined in Banco BPI's Code of Business Conduct and Ethics.

This Banco BPI Policy concerning Conflicts of Interest shall constitute the general framework for addressing conflicts of interest within the Bank, in alignment with the corporate guidelines and principles established for the CaixaBank Group. The very fact this Policy exists is in itself an element of mitigation of conflicts of interest, as it provides a general framework for such conflicts to be addressed. This general framework covers other mandatory internal regulations and standards1 applicable to different services and activities in specific areas, which also include sections expressly concerning conflicts of interest.

Banco BPI's management and supervisory bodies must take pertinent decisions in order to take on board the stipulations of this Policy and apply the guidelines established therein.

 

II. Purpose

This Policy sets out to provide a global benchmark framework for the Bank's Employees, setting forth, in a harmonised and consistent fashion, the general principles and procedures of action when addressing real or potential conflicts of interest arising in the course of its activities and services2.

In this regard, the Policy shall serve as a guide for Banco BPI, mainly in relation to the following:

(i) Identification of the areas and situations the nature of which makes them more vulnerable to potential conflicts of interest that could be detrimental to the general interests of the Bank, the Affected Persons, shareholders, and/or Customers;

(ii) Definition and adoption of measures to prevent, identify, manage and log conflicts of interest;

(iii) Procedure for disclosure of conflicts when appropriate, for cases in which the aforementioned measures prove ineffectual to eliminate or, failing this, to satisfactorily mitigate any residual risk which could be disclosed to the detriment of the Affected Persons, shareholders, and/or Customers3 .

 

III. Regulatory framework

A list of regulations concerning conflicts of interest issued by the various regulatory bodies is provided in Appendix I. This is not exhaustive and is for information purposes only, indicating the regulatory context of the Policy.

 

IV. Scope of application

Chapter I: Definition of a Conflict of Interest

On the basis of the general concept provided by the European Banking Authority (EBA), a conflict of interest is defined as a situation of discrepancy or collision between the duty of a natural or legal person and their private interests / the interests of another natural or legal person, with an inappropriate effect on the performance of their duties and responsibilities.

For the purposes of establishing common criteria to identify any conflicts of interest that may arise within Banco BPI and the companies directly or indirectly controlled by Banco BPI, S.A. (jointly referred to as "Banco BPI") or at other entities integrated in the same economic Group of which Banco BPI is a part, it shall be necessary to determine whether any of the following situations occurs:

(i) An economic, political or personal gain or any other type of gain has been obtained at the expense of another Affected Person and/or Customer;

(ii) The existence of interests other than those of an Affected Person and/or Customer in the outcome of the service or activity concerned;

(iii) The existence of financial incentives or incentives of other types to favour the interests of an Affected Person and/or Customer to the detriment of the interests of other Affected Person and/or Customers;

(iv) Carrying on a professional activity which is identical to that of the Affected Person and/or Customer;

(v) Receiving incentives from a third party in relation to the service or activity, in the form of money, goods or services, political or professional benefits, other than the commission or habitual remuneration for the service or activity concerned.

 

Chapter II: Subjective Scope: Affected Persons

TThis Policy shall apply to those involved, or who may be involved, in the activities of Banco BPI, namely its employees and the members of its Board of Directors and Supervisory Body who are considered "Affected Persons"3.

These Affected Persons shall avoid all conflicts of interest or, when these cannot be avoided, shall make use of the necessary internal mechanisms to resolve them without granting privileges to any of the said persons.

The persons associated to the former (definition of Associated Person in Appendix I) shall follow the inspiring principles of this Policy, even if in strictu sensu the content of the Policy does not apply to them.

IV. General Principles

Chapter I: General Principles of the Policy

To achieve its objectives, the policy described in this document has the following attributes:

(i) Permanent: it must serve as a stable framework to deal with conflicts of interest within Banco BPI;

(ii) Dynamic: it must be regularly reviewed so as to remain updated and effective;

(iii) Applicable: it must be adequate and allow to address actual and specific situations.

 

Chapter II: General Principles applicable to the Affected Persons

Notwithstanding the specific duties and obligations stipulated throughout this Policy, the Affected Persons must provide services and carry out their functions in accordance with the guiding inspirational principles set out in Banco BPI's Code of Business Conduct and Ethics. Consequently, in due compliance with their duty of loyalty, their professional conduct must ensure at all times that the interests of Customers, Banco BPI and its shareholders prevail over their personal interests.

In addition, they shall act upon the following principles of conduct:

(i) Independence. The Affected Persons shall act at all times with freedom of judgement, in good faith and with loyalty to the Client, Banco BPI and its Investors, regardless of their own interests or the interests of any persons which in the case at hand may be related with them.

(ii) Abstention. The Affected Persons shall abstain from participating in or influencing decision-making that may affect them, Investors and/or customers with which a conflict exists, as well as from gaining access to relevant information or privileged information which may be of relevance to said conflict.

(iii) Communication. The Affected Persons shall report any potential conflicts of interest in which they may be involved due to their activities outside the Group, their family relationships, their personal assets, or any other reason. Potential conflicts of interest shall be reported through the communication channels established by Banco BPI, and must be reported as soon as possible, and in any case prior to any decision or action that may be affected by the potential conflict of interest.

(iv) Transparency. The Affected Persons shall provide precise, truthful and comprehensible information about the conflict of interest identified, to enable the Affected Person and/or the Customer to take an informed and substantiated decision as to whether or not the activity or service concerned should be continued.

 

V. Action Procedures

The action procedures in matters of conflicts of interest described in this section shall apply to Banco BPI and therefore when carrying out their activities the Affected Persons shall act in accordance with this Policy.

Chapter I: Identification of Conflicts of Interest

Conflicts of interest may be classified in the following categories, depending on the parties involved:

  1. 1. Conflicts of interest between Banco BPI and its Customers

    Banco BPI may have a conflict of interest in the relationship with its Customers when, amongst others, there occurs or there is a real risk of occurrence of one of the situations described below:

    (i) Receipt of incentives in the form of money, goods or services, political or professional advantages, or other benefits other than the habitual commission or remuneration for the provision of services to the Customer.

    (ii) Banco BPI's capacity to influence or condition a Customer's decision is taken advantage of to the detriment of the Customer;

    (iii) Using confidential information which gives Banco BPI an advantage over the Customer concerning a service or activity;

    (iv) Privileging the interests of Banco BPI by providing a service that is not adequate to the Customer's needs nor provided under the best conditions for the Customer;

    (v) Carrying out the same activity as the Customer, if this leads to an incompatibility which generates discrepancies between the interests of both parties.

    In order to avoid incurring conflicts of interest with their Customers, the Employees and members of the Board of Directors, personally or through Related Persons, shall not accept gifts, hospitality, favours or other benefits from a Customer, especially when such is related to an operation being carried out, except in admitted circumstances, specified in Banco BPI’s Anti-corruption Policy.

  2. Conflicts of interest between Clients

    There exists a conflict of interest when Banco BPI, based on economic relationships or relationship of any other nature, gives preferential treatment to one of its Customers over other Customers, to the detriment or disadvantage of the latter.

  3. Conflicts of interest between Banco BPI and members of the Board of Directors.

    In compliance of their duty to avoid situations leading to potential conflicts of interest, the Directors of Banco BPI and Related Persons shall refrain from:

    (i) Using the name of Banco BPI or invoking their status as director to unduly influence private operations;

    (ii) Making use of Banco BPI’s assets and availing themselves of their position at the Company to obtain a financial advantage, or for any private reasons;

    (iii) Availing themselves of any Company business opportunities that may have arisen in connection with the exercise of their functions;

    (iv) Obtaining advantages or remuneration from third parties other than from Banco BPI, in association with the exercise of their functions;

    (v) Carrying out activities on their behalf or on behalf of others which effectively constitute competition, whether real or potential, with the activities of Banco BPI;

    (vi) Carrying out direct or indirect professional or commercial transactions with Banco BPI, save in the case of exceptions provided for in the law or internal regulation where such are admitted.

  4. Conflicts of interest between Banco BPI and its Shareholder

    In the context of the General Meetings of Banco BPI, the shareholder and its proxies may incur a potential conflict of interest when an attempt is made to adopt a resolution the purpose of which is to:

    (i) Release the shareholder concerned from an obligation or grant rights to the shareholder concerned;

    (ii) Provide any kind of financial assistance to the shareholder, including the provision of collateral in favour of the shareholder;

    (iii) Release the shareholder from obligations arising from the duty of loyalty legally established for directors.

  5. 5. Conflicts of interest between Employees, Associated Persons or Related Persons of the former and Banco BPI

    Employees, Associated Persons or Persons Related thereto may incur a conflict of interest when, amongst others, there occurs or there is a real risk of occurrence of one of the situations described below:

    (i) Putting their interests before those of Banco BPI, interfering with their professional activity;

    (ii) Taking part in activities or transactions of any kind in which the Employees themselves or Related Persons are the beneficiaries or direct or indirect participants;

    (iii) Making undue use of any information, goods or intellectual property to which they have access due to their position for personal reasons or reasons unrelated to the business purpose of Banco BPI. This situation is particularly serious when it involves insider information or confidential information;

    (iv) Using the name of Banco BPI for the purpose of unduly influencing the performance of an activity or service to the effect of deriving a financial, personal or political gain, or any other benefit, and causing harm to the interests, values or reputation of Banco BPI;

    (v) Making use of their position or status as Employees, Associated Persons or their Related Parties to obtain a financial advantage;

    (vi) Carrying out activities on their behalf or on behalf of others which effectively constitute real or potential competition with Banco BPI.

  6. Conflicts of interest between Banco BPI and its Suppliers

    Banco BPI may have conflicts of interest with its suppliers when there is a risk of occurrence of one of the situations described below:

    (i) Undue influence in the selection of suppliers to which Employees of Banco BPI or members of its Corporate Bodies or their Related Parties have economic or family ties;

    (ii) Receipt of gifts, hospitality, favours or other benefits from a Supplier, except in circumstances admitted by social customs, specified in Banco BPI’s internal regulations;

    (iii) Disclosing confidential information concerning the economic or technical conditions or other conditions submitted by competing suppliers for the purposes of favouring a third party;;

    (iv) Issuing a call for tenders for a specific item or service with differing requirements, depending on the supplier to which it is sent.

  7. Conflicts of interest between Divisions of Banco BPI

    Conflicts of interest may arise between Divisions of an Affected Entity, or between Divisions of different Affected Entities, including of Banco BPI, in the occurrence or possibility of occurrence of any of the following situations:

    (i) Exchange of confidential information or insider information concerning an activity or service that is detrimental to the interests of Clients/the Affected Entity itself;

    (ii) Exercising unwarranted influence on other Departments regarding their activities or services;

    (iii) Being simultaneously or consecutively involved in various services or activities, leading to a potential risk of jeopardising the interests of the customer or of the Affected Entity itself.

  8. Conflicts of interest between different entities of Banco BPI

    The Affected Entities may have conflicts of interest with Banco BPI when there is a serious risk of occurrence of any of the situations described below, although this list is not exhaustive:

    (i) Implementation of corporate development strategies or other structural modifications that may be detrimental to the interests of Banco BPI;

    (ii) Approval and marketing of products or services the characteristics and distribution strategy of which are not suited to or respond to the needs of the target market, with a consequent detrimental impact on the interests and reputation of Banco BPI as a whole;

    (iii) Use of a brand which is contrary to the positioning, values and attributes of Banco BPI

    (iv) Issuing of communications to the market, investors, analysts or media, inter alia, where the message conveyed is detrimental to the interests of Banco BPI;

    (v) Giving preferential treatment to one Customer with respect to other Customers of Banco BPI, as the consequence of economic or other ties;

    (vi) Using the name of the Group for the purpose of unduly influencing the performance of an activity or service to the effect of deriving a financial or political gain, or any other benefit, and causing harm to the interests, values or reputation of the Group.

  9. Other situations shall also be identified which, although not addressed in the aforementioned categories, are liable of generating conflicts of interest as the result of services provided and activities conducted, and of relations with the various Affected Persons, Investors and/or Customers.

 

Chapter II: Prevention Measures

Banco BPI shall have measures in place to prevent the conflicts of interest identified. There follows a list of the main measures, although this is for information purposes and is not exhaustive:

(i) Banco BPI's Code of Business Conduct and Ethics is per se an important mitigating element/factor of conflicts of interest, on the basis of the guiding principles established therein which must govern the activity of all the Affected Persons under this Policy;

(ii) The existence of an organisational structure designed to prevent and manage conflicts of interest, which guarantees proper monitoring of the aforesaid policies and procedures, and ensure that a robust and reliable control environment is in place. The current model, structured as three lines of defence, ensures that functions are properly segregated;

(iii) Recording of the activities that may give rise to conflicts of interest, including the compilation of lists of persons who had access to privileged information, as appropriate;

(iv) Periodic reporting to the management and supervisory bodies, so as to allow them to ascertain that adequate control procedures are in place and suitable measures were adopted;

(v) Adequate remuneration policies that discourage recommending financial instruments or other products not suited to Customers, to one's own benefit, thus mitigating conflicts of interest;

(vi) Establishment of specific training plans for the purposes of raising awareness and promoting honest and transparent professional conduct as a measure to prevent potential situations of conflicts of interest relating, inter alia, to improper use or use for personal reasons of confidential information, IT media, funds, assets or intellectual property;

(vii) All information received from Customers shall be considered confidential, and must therefore be treated in a rigorous and responsible fashion pursuant to the applicable legislation;

(viii) For the purposes of maintaining this confidentiality, Banco BPI shall have the necessary barriers to prevent undue use and transmission of information;

(ix) Banco BPI defines procedures to ensure the regular filing of conflict-of-interest situations;

(x) Divisions shall have sufficient human, financial and material means to guarantee the autonomy, independence and quality of their activities, ensuring that functions involving sensitive activities or services which could entail a risk of or trigger conflicts of interest are subject to supervision;

(xi) Review of this Policy every two years and whenever necessary, with the adoption of additional preventive measures resulting from the experience gained through the action procedures implemented.

 

Chapter III: Management Measures

There follows a description of the management measures applicable to the Affected Persons, Investors and Customers, and the criteria for resolving conflicts of interest. Annex III provides a catalogue of examples of existing measures to mitigate institutional Conflicts of Interest or conflicts of interest concerning employees.

  1. Affected Persons and Investors

    Employees who identify a conflict of interest must act in accordance with the internal procedures that develop this Policy.

    BPI’s Directors shall report to the Board of Directors any situation of a direct or indirect conflict of interest concerning either them or persons related to them with respect to the interests of Banco BPI. In this regard, pursuant to Banco BPI's firm commitment, as part of the CaixaBank Group, to act in a transparent fashion, any situations of a conflict of interest involving members of the Board of Directors of Banco BPI must be recorded.

    Conflicts of interest concerning Shareholders shall be reported through the communication channels established by Banco BPI.

    All Affected Persons shall likewise report, in the terms referred to in this policy, any conflicts of interest arising from positions held in the past or from past personal and professional relationships, occurred in the two years prior to their admission to Banco BPI.

  2. Customers

    SShould Customers identify any situations that could lead to potential conflicts of interest, they may report these through the communication channels established by Banco BPI. The Compliance Division shall be involved in and address the situations reported, taking charge of the necessary investigation, and to this end it shall require participation by other areas or departments of the Bank, as necessary..

    Should it prove impossible for the first line of defence to resolve the conflict, the principle of escalating the conflict described above shall apply.

  3. Criteria for resolving conflicts of interest involving Customers

    The following criteria shall be taken into account when resolving any conflicts of interest affecting Customers:

    (i) (i) In the event of a conflict between Banco BPI and a Customer, the interests of the latter must be safeguarded;

    (ii) (ii) In the event of a conflict between Customers:

    a) An attempt shall be made to ensure that no party receives preferential treatment;

    b) The services or activities contracted by Customers shall in no circumstance be disclosed to other Customers;

    c) A customer cannot be encouraged to contract a service or an activity for the purposes of benefiting another Customer. Conflicts of interest that do not involve Customers shall be resolved according to their nature and characteristics.

 

Chapter IV: Disclosure of Situations of a Conflict of Interest

If the measures adopted by Banco BPI are insufficient to ensure, with reasonable certainty, the elimination of conflicts of interest relating to the services it provides, the Bank shall apply the procedures for notifying and warning customers established in the regulations in force, namely those applying to Financial Intermediation in the context of provision of investment or ancillary services.

 

Chapter V: Logging of Conflicts of Interest

Banco BPI shall keep an updated log of conflicts of interest.

The logging process shall be carried out in two separate stages, associated to the phases which make up the life cycle of conflicts of interest.

(i) The phase of identification of the potential conflict of interest, defined in section VI, chapter I, of this document.

The following information is logged during this phase:

a) Situation identified, including the causes and circumstances which may give rise to the conflict of interest;

b) Area or division in which the conflict of interest may arise;

c) Affected Persons, Shareholders and/or Customers affected by the conflict of interest;

d) Preventive measures and management measures established to effectively mitigate the inherent risk;

(ii) The phase of management and resolution of the conflict of interest, addressed in section VI, chapter III, which gives rise to the following logs:

a) Area or department responsible for management and resolution;

b) Mitigation measures applied;

c) Date of identification of the conflict of interest;

d) Outcome of resolution.

The information logged concerning the phase of disclosure of conflicts of interest in relation to investment or ancillary services shall be governed by the stipulations of internal regulations.

 

VI. Governance of the Policy

Chapter I: Organisational Structure

  1. Board of Directors of Banco BPI

    Banco BPI's Board of Directors is the body with ultimate responsibility for compliance with the provisions of this policy and consequently for the management of the risk of compliance with respect to conflicts of interest.

    It is vested under the law with the responsibility of determining Banco BPI's management policies and strategies. With regard to the prevention and management of conflicts of interest, it has the following specific responsibilities:

    (i) The definition of a governance system that ensures sound and prudent management of Banco BPI, including adequate segregation of functions within the organisation and prevention of conflicts of interest, monitoring the implementation of the system and regularly assessing its effectiveness, adopting if necessary appropriate measures to resolve possible disputes;

    (ii) The establishment of general principles of action, supervision and communication regarding conflicts of interest that serve as a reference to enable Banco BPI to develop the necessary organisational measures and procedures.

    With respect to the Board of Directors’ Committees, the Appointments, Assessment and Remuneration Committee shall take part in the definition of the policy in what concerns the categories of staff whose professional activities have a significant impact on the Bank's risk profile, and those whose purpose is to avoid or manage conflicts of interest.

  2. Management Bodies of Banco BPI

    Banco BPI's management bodies are also responsible for:

    (i) Taking the necessary decisions to integrate the provisions of this Policy and apply the guidelines set forth therein, taking into account the specific characteristics of Banco BPI and the applicable legal and/or regulatory framework;

    (ii) Establishing and maintaining an appropriate organisational structure commensurate with the nature, scale and complexity of the services and activities developed;

    (iii) Promoting behaviours aligned with the Policy by the Affected Persons, as well as the identification and mitigation of the risks of compliance with the Policy;

    (iv) Ensuring the human, technical and financial resources required to ensure the effectiveness of the organisational and administrative measures established in relation to conflicts of interest;

    (v) Promoting the dissemination of and knowledge about the Policy among the Affected Persons, through training programmes and awareness raising campaigns.

  3. Business Areas

    Banco BPI's business areas and business support areas act as the first line of defence within their area of activity, due to their proximity to the risks of conflicts of interest inherent to the business. These areas are responsible for:

    (i) Applying the regulations in force, including this Policy, as well as any manuals on activity-specific procedures;

    (ii) Establishing procedures and proactively implementing measures to identify, mitigate and manage compliance risks related to conflicts of interest;

    (iii) Establishing and applying appropriate controls to ensure compliance with the obligations regarding conflicts of interest;

    (iv) Maintaining a centralised and up-to-date log of conflicts of interest relating to their areas of responsibility;

    (v) Making sure that training actions on conflicts of interest are effective;

    (vi) Informing Banco BPI's Compliance Division or the officer appointed for the purpose of relevant situations regarding compliance with the regulations in force on conflicts of interest;

    (vii) Assuming any other role that is specifically assigned to them related to their function as the first line of defence against potential conflict of interest situations.

  4. Banco BPI Compliance Division

    The Compliance Division, as a control area within the second line of defence, shall watch over compliance with and the correct application of this Policy in the corporate, subjective and objective areas defined in the respective sections, exercising a centralised control function.

    Without prejudice to the functions assigned to it across the set of internal standards, Banco BPI's Compliance Division shall take on the functions detailed below concerning conflicts of interest, in order to properly fulfil the aforementioned purposes:

    (i) (i) Promote the approval of the Policy by the Board of Directors, as well as any substantial changes thereto, in alignment with the Policy defined by CaixaBank;

    (ii) (ii) Ascertain whether the measures adopted by Banco BPI within the framework of the general procedures for dealing with conflicts of interest described in this Policy, are satisfactorily complied with and effective;

    (iii) (iii) Review and evaluate the Policy every two years or more frequently if the situation so requires, taking into account possible changes to CaixaBank’s Conflicts of Interest Corporate Policy, as well as to the applicable standards and internal procedures;

    (iv) (iv) Issue recommendations regarding the improvement of or adoption of additional measures relating to the general action procedures for dealing with conflicts of interest, as a result of the aforementioned review process;

    (v) (v) Prepare an annual assessment report on compliance with the Policy for submission to the Board of Directors, which shall also take into account any guidelines issued by the supervisory and regulatory entities;

    (vi) (vi) Review the centralized log of conflicts of interest identified in the different companies, as set forth in the identification phase referred to in Section VI, Chapter V;

    (vii) (vii) Clarify any questions about the Policy that may arise during its application by Banco BPI.

    (viii) Clarify any questions about the Policy that may arise during its application by Banco BPI;

    (ix) Ensure the adequate dissemination of and awareness to the Policy through campaigns and training programmesEnsure the adequate dissemination of and awareness to the Policy through awareness-raising initiatives and training programmes.

  5. Compliance Division of the Affected Entities and post holders appointed for the purpose

    The Compliance Division of the Affected Entities and respective officers appointed for the purpose are responsible for the following functions:

    (i) Propose to their governing bodies the approval of this Policy or its adaptation, taking into account their specific characteristics and the applicable legal and/or regulatory rules;

    (ii) Review the implementation of the procedures designed to provide effectiveness to the conflict of interest policy, taking into account the specific characteristics of their activity and the applicable legal rules, based on proportionality and reasonableness criteria;

    (iii) Provide for the existence of a centralised updated log of conflicts of interest;

    (iv) Resolve conflict situations where, in accordance with this Policy, it is the responsibility of the Bank's Compliance Division to assume this role, in which case they shall act in accordance with the provisions set forth in the management and resolution phase addressed in section VI, chapter V;

    (v) Monitor and supervise the adaptation of this Policy;

    (vi) Establish communication and reporting channels with the respective business areas, acting in accordance with the principles of mutual cooperation and exchange of information;

    (vii) Report to their governance bodies on the effectiveness of the Policy.

  6. Internal Audit

    The Internal Audit Division (DAI), as the third line of defence that provides independent evaluation, is responsible for the following functions:

    (i) Include in audit plans reviews on the effectiveness of the management, control and governance procedures to deal with conflicts of interest at Banco BPI. Issue relevant recommendations and monitor their proper implementation to ensure the pursuit of the strategic objectives and the improvement of the control environment;

    (ii) Inform, among other areas, the Compliance Division, about risks of non-compliance or other potential conflicts of interest that it detects in the pursuit of its activity.

 

Chapter II: Disclosure of the Policy to Clients and Affected Persons

  1. Customers

    Banco BPI’s Customers may consult the General Policy concerning Conflicts of interest at Banco BPI's corporate website.

  2. Affected Persons

    This Policy is available to Employees and members of the Board of Directors through Banco BPI's Intranet.

 

Chapter III: Training of the Affected Persons

  1. Clientes

    Employees and Board Members covered by the Policy will receive ongoing training designed to ensure they have adequate knowledge about conflicts of interest, particularly with regard to their identification, prevention and management, and that they perform their duties with professionalism, honesty and transparency.

    In addition to the fact that all Affected Persons must comply with the provisions of this Policy, Banco BPI shall ensure that the Associated Persons and Related Persons who do not receive training act in accordance with standards of conduct and values similar to those set forth in the Policy and other internal rules on conflicts of interest.

    The Compliance Division will conduct periodic reviews to ensure that Banco BPI's training plans ensure that the relevant identified persons hold adequate and updated qualifications, aligned to the regulatory requirements on matters of conflicts of interest and to the inspiring principles set forth in Banco BPI's Code of Business Conduct and Ethics, taking into account the nature and specificities of their activity.

    It is the responsibility of Banco BPI's People and Organisation Division or the officer appointed for the purpose, in liaison with the Compliance Division, to review the following elements:

    (i) The Training plan implemented by Banco BPI;

    (ii) The schedule of courses given to Employees and Members of the Board of Directors;

    (iii) The course recipients by business area and category;

    (iv) The criteria for selecting the courses’ target public;

    (v) The assessment of the courses’ success and level of acceptance, through internal surveys;

    (vi) The frequency of the courses and their duration.

    Similarly, specific training plans will be developed for Employees working in areas that are more likely to have potential conflicts of interest and therefore require greater awareness, such as investment and ancillary services.

    Upon admission, Banco BPI's Employees and members of its Board of Directors will receive an email containing the link to view the Policy via the Intranet. In addition, employees providing investment or ancillary services will be provided with the internal policies and regulations relating to the areas mentioned.

 

Chapter IV: Management of Exceptions and Specific Cases

Any situation that, in accordance with the current or future legal provisions governing matters of conflicts of interest, requires a specific procedure to incorporate specific circumstances into Banco BPI's existing policies regarding conflicts of interest, will be communicated to the Compliance Division and reported to the Group's Compliance Department for the necessary actions to be implemented.

 

VII. Infractions and sanctions

Failure to comply with the provisions of this Policy, in particular by Affected Persons providing services in connection to the securities market, is considered a serious or very serious infraction, under the terms of the regulations governing the securities market4

Similarly, conduct contrary to the obligations contained in this Policy, whether by act or omission, may constitute disciplinary offences.

 

Annexes

Appendix I: Definitions

  • Policy: this Banco BPI General Policy concerning Conflicts of Interest;
  • Affected Persons: natural or legal persons falling within the subjective scope of application of this Policy;
  • Associated Persons5: natural or legal persons that, without being classified as Employees, render services to Banco BPI on their own behalf or on behalf of third parties;
  • Related Persons: natural or legal persons whose interests, given the relationship with the Subject Persons, may be confused with the latter's. To this effect, persons acting in the name of or on behalf of Affected Persons or persons related to them shall also be deemed to be Related Persons;
  • Banco BPI: A company incorporated under Portuguese law, whose corporate purpose is the exercise of banking and other related activities permitted by law, together with other companies directly or indirectly controlled by it.

 

Appendix II: Legislation

European Union

  • Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions;
  • Commission Directive 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive;
  • Commission Regulation (EC) No 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive;
  • Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2016 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms; Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014, on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast);
  • Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012
  • Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 Text with EEA relevance
  • Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution
  • Directive (EU) 2016/1034 of the European Parliament and of the Council of 23 June 2016 amending Directive 2014/65/EU on markets in financial instruments; Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to safeguarding of financial instruments and funds belonging to clients, product governance obligations and the rules applicable to the provision or reception of fees, commissions or any monetary or non-monetary benefits.

 

Portugal

  • Companies Code, Decree-Law no. 262/86, of 2 September;
  • General Law on Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December;
  • Securities Code, Decree-Law no. 486/99, of 13 November;
  • Law no. 35/2018, of 20 July, which amends the rules on the marketing of financial products and on the organisation of financial intermediaries;
  • Bank of Portugal Notice no. 3/2020.

 

Appendix III: Sample catalogue of mitigating measures

BPI has a complete catalogue of Potential Conflicts of Interest where the main scenarios that may occur are identified, together with the measures considered fundamental to manage and mitigate conflicts of interest, the main measure being the duty to abstain from acting directly or indirectly in a situation of conflict of interest.

Below is a non-exhaustive list of mitigating measures used by Banco BPI to resolve conflicts of interest:

  • Assessment and decision of transactions or other matters: Employees must abstain from assessing or intervening in the decision-making process concerning transactions or any other matter in which they, any of their family members, or companies or other legal entities in which the former or the latter hold 10% or more of the capital or voting rights/exert significant influence/ hold senior management or supervisory positions, are directly or indirectly interested. In these situations, the process is transferred to other Employees with no hierarchical link to the former;
  • Pursuit of activities outside Banco BPI: Employees may perform functions or develop activities outside Banco BPI where there is no conflict of interest and the institution's independence and reputation are preserved. The development of concurrent activity, for own account or on behalf of third parties, must comply with a set of specific requirements, such as: the activity to be developed shall not be identical to that performed in BPI; the concurrent activity shall not be developed during the periods when the Employee must be performing his/her functions at BPI; it shall not influence, directly or indirectly, the contracting process of service providers or suppliers to the effect of benefiting the company where the Employee performs functions; the Employee shall not share information obtained during the performance of his/her functions at BPI; nor shall he/she use his/her functions at BPI and/or BPI’s logo/corporate image in his/her concurrent activity;
  • Member of Associations/Non-profit entities (including political parties): in the exercise of his/her civic/political activities, and in particular when these have a public impact, the employee/member of a governing body shall not bind the Bank, and to this end must avoid using the name or image of the Bank in his/her political and social manifestations. Any commitment, association or collaboration with political parties or other public entities, institutions or associations shall be understood to be on a personal basis, and the employee shall make clear the personal nature of the commitment;
  • Family members in the hierarchical chain: in this situation, whenever possible, a transfer to another functional area should be carried out. Family members cannot impartially assess the performance and decide on the career advancement and remuneration of others. In cases where this transfer is not possible, the situation must be presented to the Compliance Division, which will issue an opinion on the case at hand;
  • Employee performing simultaneous or consecutive tasks in different areas/Divisions of the Bank: the Employee may not perform conflicting tasks, and consequently must delegate the task to another Employee and/or service provider (contracted or not for this purpose);
  • As a general rule, the members of the management and supervisory bodies cannot undertake credit operations with Banco BPI. Only credit operations of a social nature or purpose or arising from the staff policy are permitted, and also credit due to the use of credit cards associated with the deposit account, under similar conditions to those applied to other customers of similar profile and risk.;
  • Hiring of suppliers: employees may not participate in the selection of suppliers in which they have a particular interest.
    In the event an employee/member of a corporate body could be involved in decision-making on the hiring of companies with which he/she may be related or was related in the last two years, he/she must abstain from participating in the process and inform this to the person responsible for the hiring.

 

1 This global framework is enhanced by policies, procedures and regulations in force, notwithstanding their possible adaptation to the provisions of this Policy.

2 The general action procedure covering the matters listed here is developed in detail in section VI "Action Procedures".

3 Without prejudice to the provisions of the Legal Framework of Credit Institutions and Financial Companies (“RGICSF”), with respect to Related Persons of the members of the Board of Directors.

4 Securities Code, as amended by Law no. 35/2018.

4 By way of example, Associated Persons are, among others, consultants, mediators, tied agents and suppliers.