PROSPERGATE CAPITAL LTD, is a company registered under the laws of the Republic of Cyprus, with registration number C369583. It is a regulated Cyprus Investment Firm (‘CIF’) by the Cyprus Securities and Exchange Commission (‘CySEC’) under license number 361/18. The Company is also acting as the External Manager of PROSPERGATE FUND AILFNP V.C.I.C LTD under the Small Alternative Investment Fund Managers Law of 2020 (L. 81(I)/2020). 

The registered office of the Company is situated at 2 Filiou Zannetou street, 3021 Limassol Cyprus. 

For the purposes of, inter alia, this Conflict-of-Interest Policy, the Company is operating under: 

• Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in financial instruments (“Market in Financial Instruments Directive” or “MiFID II”) which was implemented in Cyprus by the Investment Services and Activities and Regulated Markets Law of 2017 (Law  87(Ι)/2017). 
• The Commission Delegated Regulation (EU) 2017/565, supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive and Section 2 of the Questions and Answers of the European Securities and Markets Authority (“ESMA”) with respect to the provision of CFDs and other speculative products to retail investors under MiFID. 
• The Alternative Investment Funds Law of 2018 L.124(I) of 2018 (“the AIF Law”) and the Small Alternative Investment Fund Managers Law of 2020 (L.81(I) of 2020) (“the SMALL AIFM Law”).

Pursuant to the Commission Delegated Regulation (EU) 2017/565 Cyprus Investment Firms (CIFs) are required to establish, implement and maintain an effective Conflict of Interest Policy set out in writing and appropriate to the size and organisation of the CIF and the nature, scale and complexity of its business.

Further to the above,  according to the Investment Services and Activities and Regulated Markets Law (Law 87(I)/2017) , a CIF must take all appropriate steps to identify conflicts of interest between itself, including its managers and employees or other related persons, as well as any person directly or indirectly linked to them by control, and their clients or between one client and another, that arise in the course of providing any investment services, including those caused by the receipt of inducements from third parties or by the Company’s own remuneration and other incentive structures. 

This Policy is not intended to, and does not, create third party rights or duties that would not already exist if the Policy had not been made available, nor does it form part of any contract between the CIF and any Client. 

In order to identify, monitor and manage all actual and potential conflicts of interest that can and/or may arise between the Company (including related people) and its clients, the Company is committed to managing conflicts of interest in order to ensure the fair treatment of clients. This is achieved by setting appropriate procedures and controls in place which are designed to ensure that related persons engaged in different business activities involving a conflict of interest, carry on those activities at a level of independence appropriate to the size and activities of the Company and of the group to which it belongs, and to the materiality of the risk of damage to the interests of clients including the following as are necessary and appropriate for the common-platform firm to ensure the requisite degree of independence.

For the purpose of identifying the types of conflicts of interest that may arise in the course of providing investment services and whose existence may damage the interests of a client, Prospergate Capital Ltd takes into account the question of whether the Company itself or a related person, or a person directly or indirectly linked by control to the Company: 

• is likely to make a financial gain, or avoid a financial loss, at the expense of the client; 

• is interested 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 interests; 

• has a financial or other incentive to favor the interest of another client or group of clients over the interests of the client; 

• carries on the same business as 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 money, goods or services, other than the standard commission or fee for that service; 

• has a relation with the issuers of the products, e.g. close family relation; 

• keeps investor accounts in other investment firms without the prior authorization from the Company; 

• hides information from investors which they have right or access to; 

• uses inside information or non-public proprietary information for own purposes; 

• uses inside information or non-public proprietary information to recommend or solicit the purchase or sale of a security; 

• discloses inside information to other Company personnel who are not authorized to it.

In general, ‘Conflicts of Interest’ may occur in the context of any of the following relationships

1. Between or among the Company’s Clients and the Company’s management and employees including persons directly or indirectly linked to the aforesaid by control;
2. Between or among the Company’s Clients themselves;
3. Acting for own account when dealing with a Client;
4. Conflicts in agency dealings;
5. Conflicts in dealing in any capacity;
6. Conflicts in relation to research;
7. Conflicts associated with holding confidential information;
8. Conflicts in corporate finance and capital markets;
9. Conflicts arising out of the group structure;
10. Conflicts arising out of the charges for fees and commissions;
11. Conflicts arising in relation to inducements; 
12. Conflicts arising from personal account dealing. 
13. Between the interests of the Company, certain persons connected to it or a member of the Company’s group and the interests of a Client
14. Between the interests of two or more of the Company’s Clients, to each of whom the Company owes a duty, where the conflict of interest might damage or adversely affect either of their respective interests.
15. Between the Company’s employees, or between the Company and its employees;
16. Between the Company and a member of its Board of Directors (BoD) or the Company and a member of its Senior Management
17. Between the Company and its Clients as a result of the various activities and roles of the Company in its capacity as a lender, provider of investment and ancillary services as well as proprietary trader.

Typical examples of Conflict-of-Interest behavior exercised by the Company or any employee or any other connected party, may take the following form:

1. Using confidential information provided by the client for the Company’s or employees’ own benefit.

2. In order to receive more commission, the employee enters into unnecessary transactions on behalf of the client.

3. Unduly influences and/or provides advice to the client with the purpose of receiving a benefit for the company and/or any of its employees and/or any other affiliated party.

In light of the above, it is evident that the ‘Conflicts of Interest Policy’ of the Company must be aiming at:  

1. preventing or controlling the exchange of information between Related Persons engaged in activities involving a risk of a ‘Conflict of Interest’ where the exchange of that information may harm the interests of one or more Clients;

2. ensuring the separate supervision of Related Persons whose principal functions involve carrying out activities on behalf of, or providing services to, Clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Investment Company;

3. removing of any direct link between the remuneration of Related persons principally engaged in one activity and the remuneration of, or revenues generated by, different related persons principally engaged in another activity, where a ‘Conflict of Interest’ may arise in relation to those activities;

4. ensuring measures to prevent or limit any person from exercising inappropriate influence over the way in which a Related Person carries out investment services;

5. ensuring measures to prevent or control the simultaneous or sequential involvement of a Related Person in separate investment services, where such involvement may impair the proper management of ‘Conflicts of Interest’.

6. including issues specified explicitly by CySEC and the Company’s procedures  

7. (vii)The employees of the Company are prohibited from being involved in situations which may result in:

1. 1. Financial gain at the expense of the client.
   2. Interest of the employee from the outcome of a service provided to clients
   3. Favoring the interest of a client at the expense of another client
   4. Employee carrying on the same business as the client
   5. Receipt of an inducement in relation to a service provided to clients

The Company informs its employees that they should make sure that their personal interests do not conflict with the interests of the Company or its clients and in cases of doubt, whether a situation might cause a conflict of interest or not, the employee should address the issue to the Compliance Officer of the Company and ask for guidance on the actions to be taken. 

Despite the best of the Company’s efforts, some ‘Conflicts of Interest’ cannot be eradicated all together, and in such instances, the Company has adopted a transparent and fair approach of disclosing such instances as soon as they become apparent. 

The most crucial measures, which the Company follows to manage identified ‘Conflicts of Interest’, are described below in further detail.

• Compliance Department- Apart from preventing misuse of insider information and market manipulation, one of the core tasks of the Compliance Department is to identify and manage ‘Conflicts of Interest’ (potential, apparent and existing) and to monitor measures implemented within the Company and adapt them where required.

• Confidentiality and Information Barriers- The Company has adopted Confidentiality Agreements between the company and its employees/ clients and third-party providers (for outsourced functions), pursuant to which information will be protected from accidental or intentional unauthorized modification, destruction or disclosure throughout its life cycle. Additionally, the Company is bound by applicable laws relating to the handling and processing of Clients’ information such as the General Data Protection Regulation and other related laws and regulations.

• Chinese walls- The establishment of Chinese walls between the Company’s various areas of confidentiality ensures that the dissemination or communication of confidential information is limited to the extent necessary in the ordinary course of business (exceptions require special approval). All employees are bound by confidentiality, responsibilities and reporting lines are clearly defined and the sequential involvement of a related person in separate investment activities that would lead to ‘Conflicts of Interest’ is avoided. The spatial segregation of sensitive departments is also enforced.

• Separate Supervision and Segregation of Functions- The principle of segregation of duties adopted within the Company is fundamental to prevent potential ‘Conflicts of Interest’ to adversely affect the interest of the Company’s Clients. Accordingly, these principles are reflected in the Company’s organisational structures, procedures and internal control.

The Company further manages potential ‘Conflicts of Interest’ by ensuring that:

a.    supervisory arrangements provide for separate supervision of employees where necessary for the fair management of ‘Conflicts of Interest’;

b.   functions which could potentially yield conflict situations are segregated by means of separate reporting lines;

c.    no single employee is simultaneously or successively involved in two different Services when that poses a potential ‘Conflict of Interest’;

d.   as far as possible, a third party cannot improperly influence the decisions taken by employees that provide the Services;

e.   Chinese Walls are maintained to restrict exchange of information between different Units or Departments within the Company.

Four-eye supervision is conducted on all related persons whose principal functions involve the carrying out of activities on behalf of, or providing services to, Clients whose interest may conflict, or who may otherwise represent different interests that may conflict, including those of the Company.

• Training and Monitoring- The Company insists that in its dealings with Clients its employees must use the highest standard of integrity in their actions at all times. The induction, on-going training and monitoring programs organized by the Company and, in particular, the Company’s Compliance department, are designed to ensure that all related staff are familiar with and observe, inter alia, all applicable rules and procedures in relation to the provision of the Services provided by the Company.

• Clients’ Orders – Before allocating investments to Clients, we comply with our regulatory obligations to assess suitability or appropriateness. It is our policy to offer allocations to Clients for whom the investment is suitable, or appropriate, who have sufficient funds in their account on the commitment date and who understand the investment’s terms and conditions and are willing to be bound by them (including any special considerations, such as selling restrictions, which are generally for a limited period of time). Our policy is to allocate investments on a pro-rata basis wherever practicable.

• Inducements to the Company from Clients- The Company, in providing Services, must act honestly, fairly and professionally in accordance with the best interests of a Client. In so doing, the Company may (i) receive a fee, commission or a non-monetary benefit from the Client or a person acting on the Client’s behalf or (ii) pay a fee, commission or other nonmonetary benefit to a Client or a person acting on the Client’s behalf.

The Company may also (i) receive a fee, commission or a non-monetary benefit, from a third party or a person acting on behalf of such third party; or (ii) pay a fee, commission or a nonmonetary benefit to a third party or a person acting on behalf of such third party, if:

a.  prior to providing the Service, the Company discloses to the Client in a manner which is comprehensive, accurate and understandable, the existence, nature and amount of fee, commission or non-monetary benefit or where the amount cannot be ascertained, the method of calculating that amount; and

b.   the fee, commission or non-monetary benefit is designed to enhance the quality of the Service to the Client and does not impair compliance with the Company’s duty to act in the Client’s best interests.

In addition, the Company may pay or receive proper fees which are necessary for the Company to be able to provide the Service and which by their very nature cannot give rise to conflicts with the Company’s duty to act honestly, fairly and professionally in the best interests of the Client such as custody fees, settlement and exchange fees, regulatory levies and legal fees. As such, the Company may be paid inducements by fund companies and issuing houses as remuneration for the sale of their financial instruments. This may include portfolio volume dependent trailer fees paid by fund companies out of the respective management fees collected from investors and the sales commissions paid by issuers of securities in the form of placement commissions, reductions on issue prices (discount/rebate) and trailer fees. In order to avoid any ‘Conflicts of Interest’, in those instances the Company has decided not to retain inducements paid in favor of the Company, but to pass such payments through to its Clients.

Furthermore, in some instances, the Company may receive non-monetary inducements from other service providers in connection with its investment business, e.g. financial analyses or other data, training and sometimes technical services and equipment for access to third-party information and dissemination systems. These inducements are not directly related to services provided to Clients and the Company uses them to provide the high-quality services that Clients expect. They allow on-going improvements to the Company’s Services.

• Inducements to Employees from Clients- The Company has adopted a strict no inducements policy, which defines its pricing policy in relation to commissions, charges and other costs and expenditures required to provide investment services and products, in an accurate, clear and detailed manner, and provides that the Company does not pay, accept or allows its personnel, management, executive staff members and other persons working under contract for the Company to pay, provide or receive any direct or indirect fees, commissions, discounts or non-monetary benefits from Clients or third parties acting on behalf of Clients, except for those clearly defined for each case.

Under the Company’s Remuneration Policy, the Company’s employees are prohibited from offering or receiving, soliciting or accepting any inducements, gifts, benefits, compensation or consideration that reasonably could be expected to compromise their own or another’s independence and objectivity. Employees are prohibited from soliciting gifts for themselves, their family members or related parties. Attempts by suppliers, Clients or third parties to solicit gifts during the course of their interaction with the Company’s employees, should immediately be reported to the company’s Compliance Officer.

The acceptance of receipt of cash (bank notes or equivalent) is specifically prohibited.

The acceptance of discounts in excess of normal commercial practice or free memberships is prohibited.

• Appropriate Procedures for monitoring Inducements- In monitoring its obligations, the Company’s Compliance Department shall ensure, together with the Company’s senior management, that all relevant inducements have been identified and classified in relation to the Service being proposed and conform with all the above conditions.

• Remuneration Policy- The Company has adopted a ‘Remuneration Policy’, which contains measures to reduce the risk of potential ‘Conflicts of Interest’ through the internal monitoring of investment decisions by staff and combining performance-related pay and fixed remuneration. In this regard, remuneration criteria have been established by the Company, which reasonably ensure the objectivity and independence of the services provided, without favoring the interest of one business area over another.

In line with its ‘Remuneration Policy’, the Company undertakes to ensure that it does not give incentives to activities that may lead to ‘Conflicts of Interest’. The Company will not offer remuneration packages that reward behavior that disadvantages the interests of Clients in favor of the Company or other Clients. Employees are rewarded on the basis of merit.

• Personal account dealing- According to the Company’s rules and procedures, Personal Account Transactions (PA dealings) are prohibited from taking place. The Company employees have all signed a relevant declaration stating that they will not engage in Personal Account dealing activities and this was done in order to avoid any market abuse, conflicts of interest,  conflict with an obligation of the Company under the MiFID II, misuse or improper disclosure of confidential information, entering into a prohibited transaction or to advise or procure another person to enter into such a transaction.

• Insider trading and market manipulation (market abuse) and Inside Information- The Company complies with the legal requirement of preventing market abuse (insider trading and market manipulation) by the Company and its employees. The Company has put in place its “Market Abuse Policy (Systems and Procedures for Suspicious Transactions and Orders Reporting (STOR)” which is in accordance with the provisions of the European Union (EU) Regulation No 596/2014, Regulation (EU) No 2016/957 , Cyprus Law No 102(I)/2016 and Cyprus Law No 136(I)/2016 as amended. More information on the Market Abuse Policy of the company can be found in the same and employees are currently required to revise the relevant document.

In general, the procedures and controls that the Company follows to manage the identified conflicts of interest are as described in the above sections of the Policy but also include the following measures:

(a) A ‘need to know’ policy governing the dissemination of confidential or inside information within the Company.

(b) Chinese walls restricting the flow of confidential and inside information within the Company, and physical separation of departments. Communication of information and data between the various business units of the Company, whether the Company’s officers and/or employees have access to data in the possession of business units to which such access is not permitted. Chinese Walls are erected between the Asset Management Department of the Company and the rest of the Company’s organisational units, so that to prevent the flow of confidential information in a way that which adversely affect the interest of the Clients. The Company’s Compliance Department is responsible for maintaining such Chinese Walls, by means of regular checks and monitoring.

(c) Procedures governing access to electronic data.

(d) Segregation of duties that may give rise to conflicts of interest if carried on by the same individual.

(e) Personal account dealing requirements applicable to relevant persons in relation to their own investments.

(f) A gifts and inducements log registering the solicitation, offer or receipt of certain benefits.

(g) The prohibition of external business interests conflicting with the Company’s interests as far as the Company’s officers and employees are concerned, unless Board of Directors approval is provided.

(h) A policy designed to limit the conflict of interest arising from the giving and receiving of inducements.

(i) Establishment of in-house Compliance Department to monitor and report on the above to the Company’s Board of Directors. This will also update the relevant internal procedures and ensure compliance with such procedures.

(j) Appointment of Internal auditor to ensure that appropriate systems and controls are maintained and report to the Company’s Board of Directors.

(k) Establishment of the four-eyes principle in supervising the Company’s activities.

It is the responsibility of each and every employee of the Company to familiarize themselves with this Policy and to immediately disclose ‘Conflicts of Interest’ or potential ‘Conflicts of Interest.

When there is a conflict of interest, the person who detected the situation must immediately notify the manager and the Compliance Department. Notifications should be made in the shortest time possible and, in any case, before taking any decision which might be affected by the possible conflict of interest.

The Compliance Department will inform the Risk Management Department and senior management of the Company of the matter and the Compliance Department, the Risk Management Department and the senior management of the Company will then jointly agree on the necessary measures for the management of such ‘Conflicts of Interest’, always putting the interests of Clients before those of the Company.

The members of the Company’s Risk Management Department, senior management and/or Board of Directors, who are themselves subject to a conflict of interest, shall promptly inform the Compliance Department and the Board of Directors of the Company, on their own initiative. The procedures, in this regard, provide that these members shall abstain from participating in the decision-making processes where they may have a ‘Conflict of Interest’ or which prevent them from deciding with full objectivity and independence.

In the event that it is considered that the measures taken are not reasonably sufficient to avoid the risk that a Client’s interests may be harmed, the Client will be informed about the nature of the conflict and any other circumstances that will allow them to make an informed decision about the investment service to be purchased from the Company.

MiFID II requires the disclosure of individual, specific cases of ‘Conflicts of Interest’: Individual ‘Conflicts of Interest’ towards affected Clients must always be disclosed, whenever organizational and contractual precautions are inadequate.

The purpose of this is to enable the Client to decide whether he wants to avail of the service nevertheless. This will only be possible if the information given provides a sufficient basis for making such a decision and for this reason, sufficient details of the conflict must be given. The degree of detail entered into requires that a relative assessment of the interests of other Clients is also carried out. Insider information must not be disclosed. Thus, prior to making any disclosure, it must be checked whether the particular information could turn into insider information at some point.

Furthermore, where the organizational or administrative arrangements described in this Policy are not sufficient to ensure with reasonable confidence that risks of damage of Client interests will be prevented, the Company clearly discloses the general nature and/or sources of ‘Conflicts of Interest’ to the Client before undertaking business on its behalf. Disclosures to Clients are done in sufficient detail to enable the Client to make an informed decision about the investment service in the context of which the conflict arises.

In the event of any potential or apparent ‘Conflict of Interest’ which the employee responsible for the provision of the Company’s services to the Client knows or should have known and which has not been disclosed to Clients, the Company, in accordance with the prevailing circumstances and before the conclusion of the transaction, informs the Client in writing or by any other equivalent means (e.g. by electronic mail), either generally and/or in abstract or in connection with the specific transaction, in respect of the risks of ‘Conflicts of Interest’ between the Client and the Company, or between the Client and other Clients of the Company.

If a ‘Conflict of Interest’ cannot be prevented despite the organizational and administrative arrangements made by the Company, the Company must resolve such ‘Conflict of Interest’ in the interests of Clients. Possible ways of resolving such a ‘Conflict of Interest’ include either (a) the disclosure of the ‘Conflict of Interest’ to the Client(s) prior to undertaking any investment business for that Client, or (b) if the Company is of the opinion that disclosure is not appropriate to manage the conflict properly, refraining from proceeding with the transaction or matter giving rise to the ‘Conflict of Interest’.

Accordingly, where the Company considers it is not able to manage the ‘Conflict of Interest’ in any other way, it may decline to act for a Client.

This policy may be updated and changed from time to time in order to comply with any new legal requirements and/or amendments. Should such changes commence, the updated Conflict-of-interest policy will be published on our website.

If you would like to contact us with any queries or comments, please send an email to [email protected]

Prospergate Capital Ltd is a Cyprus Investment Firm (CIF) that is authorized by the Cyprus Securities and Exchange Commission (CySEC) (License number 361/18), with the license to perform portfolio management services. The company externally manages, on a discretionary basis, client funds that are located in global financial institutions pursuant to a pre-defined investment strategy. Since the risk of investing in certain financial instruments is generally high and the market value of such financial instruments may be exposed to varying factors, such as a turbulent economic and political environment, fluctuations in foreign exchange rates and shifts in market sentiment, the investor takes full responsibility for the risk involved with such investments and understands and acknowledges that investment yield and or capital preservation is not guaranteed. The investor should ensure that they are fully aware of the potential risks connected with Portfolio Management services and with their chosen investment strategy. The investor should be aware of the fact that some investment strategies may involve a higher degree of risk compared to other strategies and investments within this framework which may result in the loss of all or part of the initial investment. The investor should also understand and acknowledge that past performance does not guarantee future returns. Past performance should not be taken as an indication or guarantee of future performance.